E$15\mathrm{.}11$B $($LO $3)($Issuance$,$ Exercise, and Termination of Stock Options$)$ On January $1,2024,$ EZ Inc.

granted stock options to officers and key employees for the purchase of $250,000$ shares of the

company$$s $$1$ par common stock at the market price of $$86$ per share. The options were exercisable

within a $5-$year period beginning January $1,2026,$ by grantees still in the employ of the company, and

expiring December $31,2028.$ The service period for this award is $2$ years. Assume that the fair value

option pricing model determines total compensation expense to be $$1,250,000($$$5$ per stock option$).$

On July $1,2025,20,000$ stock option were forfeited when the employees resigned from the company.

The market value of the common stock was $$88$ per share on this date.

On March $31,2026,130,000$ stock option were exercised when the market value of the common stock

was $$91$ per share.

$-$Instructions

Prepare journal entries to record the

$$ Issuance of the stock options on January $1,2024,$

$$ Forfeiture of the stock options on July $1,2025,$

$$ Exercise of the stock options on March $31,2026,$ and

$$ Charges to compensation expense, for the years ended December $31,2024,2025,$ and $2026$