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

Heidi Software Corporation provides a variety of share$-$based compensation plans to its employees. Under its executive stock option

plan, the company granted options on January $1,2024,$ that permit executives to acquire $14$ million of the company's $$1$ 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, $$45\mathrm{.}00$ per share.

The fair value of the $14$ million options, estimated by an appropriate option pricing model, is $$11$ per option.

No forfeitures are anticipated.

Ignore taxes.

Required:

Determine the total compensation cost pertaining to the options.

Prepare the appropriate journal entry to record the award of options on January $1,2024.$

Prepare the appropriate journal entry to record compensation expense on December $31,2024.$

Prepare the appropriate journal entry to record compensation expense on December $31,2025.$

Complete this question by entering your answers in the tabs below.

Prepare the appropriate journal entry to record the award of options on January $1,2024.$

Prepare the appropriate journal entry to record compensation expense on December $31,2024.$

Prepare the appropriate journal entry to record compensation expense on December $31,2025.$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in

millions $($i$.$e$.,10,000,000$ should be entered as $10).$