Problem $19-1($Static$)$ Stock options; forfeiture; exercise $[$LO$19-2]$

On October $15,2023,$ the board of directors of Martinez Materlals Corporation approved a stock option plan for key executives. On January $1,2024,20$ million stock options were granted, exercisable for $20$ million shares of Martinez's $$1$ par common stock.

The options are exercisable between January $1,2027,$ and December $31,2029,$ at $80\%$ of the quoted market price on January $1,2024,$ which was $$15.$

The falr value of the $20$ million options, estimated by an appropriate option pricing model, is $$6$ per option.

Martinez chooses the option to recognize forfeltures only when they occur.

Ten percent $(2$ million$)$ of the options were forfeited when an executive resigned in $2025.$

All other options were exercised on July $12,2028,$ when the stock's price jumped unexpectedly to $$19$ per share.

Required:

Ignore.

Ignore.

Prepare the journal entries to reflect the effect of forfelture of the stock options on Martinez's financial statements for $2025$ and $2026.$

Prepare the journal entry to account for the exercise of the options in $2028.$