On January 4, 2014, Select Bud Company granted 20,000 options to a group of its senior executives. Each option allows the executive to purchase one share of Select Bud's $2 par value common stock at $25 per share. The options are exercisable within a 2 year period beginning on January 1, 2016, if the grantee is still employed by the company on the date of the exercise of the option. On the grant date the stock was trading at $15 per share, and a fair value option pricing model determines total compensation to be $700,000. The service period was the two calendar years ended December 31, 2016. On February 28, 2016 10,000 options were exercised when the market price of Select Bud's stock was $50 per share. The remaining options were still outstanding as of the end of 2016. Provide the journal entries for 2016.