Reference no: EM132547980

On January 1, 2017, Bugaboo Corporation granted 40,000 options to key executives. Each option allows the executive to purchase one share of Bugaboo's common shares at a price of $30 per share. The options were exercisable within a two-year period beginning January 1, 2019, if the grantee was still employed by the company at the time of the exercise. On the grant date, Bugaboo's shares were trading at $25 per share, and a fair value options pricing model determined total compensation to be $1,680,000. Management has assumed that there will be no forfeitures because they do not expect any of the key executives to leave. On May 1, 2019, 12,000 options were exercised when the market price of Bugaboo's shares was $34 per share. The remaining options lapsed in 2020 because executives decided not to exercise their options. Management was indeed correct in their assumption regarding forfeitures in that all executives remained with the company. Assume that Bugaboo follows IFRS.

Question 1: What are the journal entries related to the stock option plan for the years ended December 31, 2017 through 2020.