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On October $15,2023,$ the board of directors of Martinez Materlals Corporation approved a stock option plan for key executlves. On January $1,2024,28$ million stock options were granted, exercisable for $28$ 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 fair value of the $28$ 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 $(28$ million$)$ of the options were forfelted when an executlve resigned in $2025.$

All other options were exercised on July $12,2028,$ when the stock's price Jumped unexpectedly to $$27$ per share.

Required:

When is Martinez's stock option measurement date?

$2$ Determine the compensation expense for the stock option plan in $2024.($Ignore taxes.$)$

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

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

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

&$.5.$ Prepare the necessary journal entries.

Note: If no entry is required for a transaction$/$event$,$ select $"$No foumal enty required" in the first account field. Enter your answers in milions rounded to $1$ decimal place $($i$.$e$,5,500,000$ should te entered as $5\mathrm{.}5)$

Journal entry worksheet

$23$

Record compensation expense on December $31,2025.$

Wowe Erter debits hetishe creas

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