Question 4 (16 marks)
On January 1st, 20x9, GHI Inc. granted options to its twenty employees allowing for the purchase of 12,000 shares at $5 per share. The options vest evenly over the 3 years following the date of issue. The options are only exercisable as of December 31st, 20x11. The fair value of these options (using an Option Pricing model) is $30,000.
Provide the required journal entries to record the accrual of compensation expense and the exercise of the options and
Suppose that some of the options were forfeited by the employees. Actual and estimated forfeiture data are provided in the table below:
Year	1	2	3
Total employees	20	20	20
Employees expected to forfeit	2 (10%)	4 (20%)
Employees expected to remain until vesting	18 (90%)	16 (80%)
Employees actually forfeiting in the year	1	2	0
Employees receiving options			17