On 1 July 2019 Cooloola Ltd provided 1 million options to its chief executive officer. The options were valued at $1 each and allowed the chief executive officer to acquire shares in Cooloola Ltd for $7 each. The chief executive officer is not permitted to exercise the options before 30 June 2021 but may then exercise them any time between 1 July 2021 and 30 June 2022. The market price of the Cooloola Ltd shares on 1 July 2019 was $6.50. On 31 December 2021 the share price reaches $7.70 and the chief executive officer decides to exercise 900 000 options and acquire the shares in Cooloola Ltd and the rest options lapse.

Required: Prepare general journal entries to record the above events. Narrations are required