Wall drugs offered an incentive stock option plan to its employees. On January 1, 2018, options were granted for 60,000 common share (par value $0.01). The exercise price equals the $5 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2021, and expire on December 31, 2022. Each option has a fair value of $1 based on an option-pricing model.

a. Provide the journal entry required for January 1, 2018. Write no entry if unnecessary.

b. Provide the journal entry for exercises of 90% of the options at a market price of $8 on December 31, 202 Write no entry if unnecessary.

c. Provide the journal entry for the expiration of the remaining 10% of the option on January 1, 2023. Write no entry if unnecessary.

d. What is the total compensation COST for this plan?