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Walters Audio Visual Inc. offers an incentive stock option planto its regional managers. On January 1, 2018, options were grantedfor 24 million $1 par common shares. The exercise price is themarket price on the grant date—$7 per share. Options cannot beexercised prior to January 1, 2020, and expire December 31, 2024.The fair value of the 24 million options, estimated by anappropriate option pricing model, is $1 per option. Required: 1.Determine the total compensation cost pertaining to the incentivestock option plan. 2. to 5. Prepare the appropriate journal entriesto record compensation expense on December 31, 2018 and 2019.Prepare the appropriate journal entry to record the exercise of 75%of the options on March 12, 2020, when the market price is $8 pershare and the entry on December 31, 2024, when the remainingoptions that have vested expire.