Entry options for (2) Advanced compensation

Cash

Compensation expense

Compensation payable

Common stock at par

Paid-in capital-excess of par

Paid-in capital-stock options

Entry options for (3) Advanced compensation

Cash

Compensation expense

Compensation payable

Common stock at par

Paid-in capital-excess of par

Paid-in capital-stock options

Entry options for (4) Advanced compensation

Cash

Compensation expense

Compensation payable

Common stock at par

Paid-in capital-excess of par

Paid-in capital-stock options

Entry options for (5) Deferred tax asset

Deferred tax liabilities

Income taxes payable

Tax benefit

Tax expense

Entry options for (6) Advanced compensation

Cash

Compensation expense

Compensation payable

Common stock at par

Paid-in capital-excess of par

Paid-in capital-stock options

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4. Record the exercise of the options and their tax effect if all of the options are exercised on March 20, 2031. when the market price per share is 514 WorldStreet, Inc., offers a stock option plan to its regional managers On January 1, 2026,40 million options were granted for 40 million $1 par common shares. The exercise price is the market price on the grant date, $8 per share. Options cannot be exercised prior to January 1, 2028, and expire December 31, 2012. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. Because the plan does not qualify as an incentive plan, WorldStreet will receive a tax deduction upon exercise of the options equal to the excess of the market price at exercise over the exercise price The income tax rate is 24% If you cannot find an appropriate account in the drop down menu, please put your account in the brown color cell 1. Determine the total compensation cost pertaining to the stock option plan. Type in numbers only. $ million 2. Prepare the appropriate journal entries to record compensation expense and its tax effect on December 31, 2026 million million million million 5. Assume the option plan qualifies as an incentive plan. Prepare the appropriate journal entries to record compensation expense and its tax effect on December 31, 2026 Dr. Cr. Dr. 3. Prepare the appropriate journal entries to record compensation expense and its tax effect on December 31, 2027, milion million million milion milion million milion million million million 6. Prepare the option plan qualifies as an incentive plan, record the exercise of the options and their tax effect if all of the options are milion million exercised on March 20, 2031, when the market price per share is $123 milion million milion millian 8888888 million milion milton milion 4. Record the exercise of the options and their tax effect if all of the options are exercised on March 20, 2031. when the market price per share is 514 WorldStreet, Inc., offers a stock option plan to its regional managers On January 1, 2026,40 million options were granted for 40 million $1 par common shares. The exercise price is the market price on the grant date, $8 per share. Options cannot be exercised prior to January 1, 2028, and expire December 31, 2012. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. Because the plan does not qualify as an incentive plan, WorldStreet will receive a tax deduction upon exercise of the options equal to the excess of the market price at exercise over the exercise price The income tax rate is 24% If you cannot find an appropriate account in the drop down menu, please put your account in the brown color cell 1. Determine the total compensation cost pertaining to the stock option plan. Type in numbers only. $ million 2. Prepare the appropriate journal entries to record compensation expense and its tax effect on December 31, 2026 million million million million 5. Assume the option plan qualifies as an incentive plan. Prepare the appropriate journal entries to record compensation expense and its tax effect on December 31, 2026 Dr. Cr. Dr. 3. Prepare the appropriate journal entries to record compensation expense and its tax effect on December 31, 2027, milion million million milion milion million milion million million million 6. Prepare the option plan qualifies as an incentive plan, record the exercise of the options and their tax effect if all of the options are milion million exercised on March 20, 2031, when the market price per share is $123 milion million milion millian 8888888 million milion milton milion