Question 6. (19 MARKS) Part A - 10 Marks The following 4 points set out in chronological order the events pertaining to the stock option plan established for the executives of Stabilizers Inc. Stabilizers uses the fair value method of accounting for options. 1. On January 1, 2010, the shareholders of Stabilizers adopted a stock option plan for its top executives whereby each executive might receive stock options to purchase up to 10,000 common shares at $20 per share (exercise price). The shares were trading at $20 per share on this date. The fair value of the options as determined by an appropriate option-pricing model is $15 each. 2. On January 2, 2011, stock options were granted to each of 5 executives to purchase 10,000 common shares (for a total of 50,000 shares). The shares are now trading at $55.00. The options were non-transferable and the executive had to remain an employee of the company to exercise the options. The options vest on December 30, 2012 and expire on December 31, 2013. The fair value of the options is now $45 each. 3. On December 31, 2013, 4 executives exercised all of their options. The shares were trading at $62 at that time. The options were worth $62 each. 4. The 5th executive's options lapsed because he forgot he had them! Required: Prepare the required journal entries on the dates listed below. If no entry is required then state this fact and why. The company year-end is every December 31. a. January 1, 2010. b. January 2, 2011. c. December 31, 2012. d. December 31, 2013. exercise Price 20 Sxtus Soruso Stock option