On January 1, 2019, Grouper Corporation granted 10,800 options to key executives. Each option allows the executive to purchase one share of Grouper's $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2021, if the grantee is still employed by the company at the time of the exercise. On the grant date, Grouper's stock was trading at $26 per share, and a fair value option-pricing model determines total compensation to be $431,000. On May 1, 2021, 7,440 options were exercised when the market price of Culver's stock was $30 per share. The remaining options lapsed in 2020 because executives decided not to exercise their options.
Required:
Prepare the necessary journal entries related to the stock option plan for the years 2019 through 2021.
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