On January $1,2025,$ Sharp Corp. granted an employee options to purchase $6,000$ shares of Sharp's $$5$ par value common

stock at an exercise price of $$20$ per share. The options became exercisable on December $31,2026,$ after the employee

completed two years of service. On the grant date, an option pricing model determines total compensation expense to be

$$140,000.$ On January $1,2027,$ the employee exercised $1,500$ of the outstanding options. The journal entry on the exercise

date should include which of the following:

a debit to cash of $$7,500$

a credit to Common Stock of $$30,000$

no entry is needed on the exercise date.

a debit to Paid in Capital $-$ Stock Options of $$35,000.$