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 $17$ million of the company's $$1$ par common shares for $$18$ 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 $$20$ per share.

The fair value of the $17$ million options, estimated by an appropriate option pricing model, is $$5\mathrm{.}10$ per option.

Required:

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

& $3.$ 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 $$21$ per share.

Complete this question by entering your answers in the tabs below.

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

Note: Enter your answer in millions rounded to $1$ decimal place $($i$.$e$.,5,500,000$ should be entered as $5\mathrm{.}5).$