Question 16 3. Prepare the necessary entries for the following events using the fair value method (20 points). O pts 1. On 1/1/2021, the stockholders granted stock options to each of five executives to purchase 30,000 shares of common stocks at $40 per share. The par value is $10 per share. 2. The options were non-transferable and the executive had to remain an employee of the company to exercise the option The options become vested on 1/1/2023. It is assumed that the options were for services performed equally in 2021 and 2022. The Black-Scholes option pricing model determines total compensation expense to be $3,200,000 3. At 2/1/23, four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were expired