Exercise $19-6($Algo$)$ Stock options $[$LO$19-2]$

HeldI Software Corporation provides a varlety of share$-$based compensation plans to its employees. Under its executive stock option plan, the company granted options on January $1,2024,$ that permit executlves to acquire $18$ million of the company's $\backslash (\backslash$$ $1\backslash )$ par common shares within the next five years, but not before December $31,2025($the vesting date$).$

The exercise price is the market price of the shares on the date of grant, $\backslash (\backslash$$ $31\mathrm{.}00\backslash )$ per share.

$-$ The falr value of the $18$ million options, estimated by an appropriate option pricing model, is $\backslash (\backslash$$ $7\backslash )$ per option.

$-$ No forfeltures are anticlpated.

$-$ Ignore taxes.

Required:

$1.$ Determine the total compensation cost pertaining to the options.

$2.$ Prepare the approprlate Journal entry to record the award of options on January $1,2024.$

$3.$ Prepare the approprlate Journal entry to record compensation expense on December $31,2024.$

$4.$ Prepare the approprlate Journal entry to record compensation expense on December $31,2025.$