Wall Drugs offered an incentive stock option to its employees. On January 1, 2021, options were granted for 67,000 $1 par common shares. The exercise price equals the $3 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model.

Which is the correct entry to record the exercise of 70% the options on April 15, 2024, when the market price of the stock was $6?

Multiple Choice

1) Debit CASH 140,700, Debit Paid in Capital- Stock options 46,900, Debit Compensation Expense 93,800, Credit Common stock 46,900, Credit Paid in Capital-excess of par 234,500

2)Debit Cash 140,7000, Debit Paid in Capital- stock options 46,900, Credit common stock 46,900, Credit Paid in capital- excess of par 140,700

3) Debit cash 234,500, Debit Paid in capital- stock options 46,900, credit common stock 46,900, credit paid in capital- excess of par 234,500

4)Debit cash 140,700, debit paid in capital-stock options 46,900, credit common stock 67,000, and credit paid in capital-excess of par 120,600