Stock option accounting (9 points)

Batty, Inc. grants 6,000 stock options to key executives on 1/2/2019. Each option allows the holder to buy one share of $4 par common stock for $16 per share. The options are exercisable beginning on 1/1/2021 for a 2-year period. At the grant date, the stock was trading at $12 per share. A fair value option pricing model put the value of the options at $156,000 on 1/2/2019. On 5/1/2021 1,200 options are exercised when the market price is $24 per share.

Required:

a) What entry is made at inception of the plan on 1/2/2019? If none, please state this.

b) What entry is made at year end 2019 by Batty?

c) What entry is made by Batty when the 1,200 options are exercised on 5/1/2021?