Morrissey Corporation grants 50,000 stock options to its managerial employees on December 31, 2013, to purchase 50,000 shares of its $1 par value common stock for $60 per share. The market price of a share of common stock on this date is $60 per share. Employees must wait two years before the options vest and they can exercise the options, and this two-year period is the expected period of benefit from the stock options. An option-pricing model indicates that the value of these options on the grant date is $400,000. On June 30, 2016, holders of 30,000 options exercise their options at a time when the market price of the stock is $65 per share. On November 15, 2016, holders of the remaining options exercise them at a time when the market price of the stock is $72 per share.
Present journal entries to record the effects of the transactions related to stock options during 2013, 2014, 2015, and 2016. The firm reports on a calendar-year basis. Ignore income tax effects.