SSG Cycles manufactures and distributes motorcycle parts and supplies. Employees are offered a variety of share$-$based compensation plans. Under its nonqualified stock option plan, SSG granted options to key officers on January $1,2024.$

The options permit holders to acquire $18$ million of the company$$s $$1$ par common shares for $$17$ within the next six years, but not before January $1,2027($the vesting date$).$

The market price of the shares on the date of grant is $$19$ per share.

The fair value of the $18$ million options, estimated by an appropriate option pricing model, is $$5\mathrm{.}10$ per option.

Required:

$1.$ Determine the total compensation cost pertaining to the incentive stock option plan.

$2.$ & $3.$ Prepare the appropriate journal entries to record compensation expense on December $31,2024,2025,$ and $2026.$ Record the exercise of the options if all of the options are exercised on May $11,2028,$ when the market price is $$20$ per share.