Recording Stock Options: Issuance and Exercise prior to five years from the grant date. Continuing employment is required through exercise date, and the requisite service period ends on the first possible exercise date. Smith exercised her options on December 31 of Year 4 when the market price of the stock was $60 per share. a. Compute the total amount of compensation cost for the grant made to Smith on January 1 of Year 2. b. What entry should be made on the date of the grant? c. What entry should be made on December 31 of Year 2 ? d. Provide the entry to record the exercise of the options held by Smith on December 31 of Year 4. Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/Acredit" as the account names and leave the Dr. and Cr. answers blank (zero). a. Total amount of compensation cost \$