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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

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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, 2018. 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, 2021 (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 $5.1 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, 2018, 2019, and 2020. Record the exercise of the options if all of the options are exercised on May 11, 2022, when the market price is $20 per share. Complete this question by entering your answers in the tabs below. Req1 Reg 2 and 3 Determine the total compensation cost pertaining to the incentive stock option plan. (Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Total compensation cost Y million Reg 2 and 3 > Reg 1 Reg 2 to 5 Prepare the appropriate journal entries to record compensation expense on December 31, 2018 and 2019. Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12, 2020, when the market price is $11 per share and the entry on December 31, 2024, when the remaining options that have vested expire. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Show less View transaction list 1. Record compensation expense obecember 31, 2018. 2 Record compensation expense on December 31, 2019. 3 Record the exercise of 75% of the options on March 12, 2020, when the market price is $11 per share. 4 Record expiration of options. Credit Note : - journal entry has been entered Record entry Clear entry View general journal

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