Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 24 million $1 par common shares. The exercise price is the market price on the grant date—$7 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the 24 million options, estimated by an appropriate option pricing model, is $1 per option.
a. Determine the total compensation cost pertaining to the stock option plan. (Enter your answer in millions (i. e., 10,000,000 should be entered as 10).)
b. Prepare the necessary journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i. e., 10,000,000 should be entered as 10).)