On January 1, 2021, Crane Company granted stock options to officers and key employees for the purchase of 18000 shares of the company's $1 par common stock at $18 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a five-year period beginning January 1, 2024 by grantees still employed by Crane. The Black-Scholes option pricing model determines total compensation expense to be $180300. The market price of common stock was $24 per share at the date of grant. The journal entry to record the compensation expense related to these options for 2021 would include a credit to the Paid-in Capital-Stock Options account for O $0. O $36060. O $60100. O $32400.

On January 1, 2021, Crane Company granted stock options to officers and key employees for the purchase of 18000 shares of the company's $1 par common stock at $18 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a five-year period beginning January 1, 2024 by grantees still employed by Crane. The Black-Scholes option pricing model determines total compensation expense to be $180300. The market price of common stock was $24 per share at the date of grant. The journal entry to record the compensation expense related to these options for 2021 would include a credit to the Paid-in Capital-Stock Options account for O $0. O $36060. O $60100. O $32400.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 7E

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On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25 executives, with the number of shares based on the yearly increase in sales. At the end of 2019, based on a 10% increase in sales, it expects that each executive will be granted 150 options and that the fair value of an option expected to vest is 15.75. Phoenix expects a turnover rate of 15% over the 3-year service period. Determine the compensation expense for 2019 for this plan.
On January 1, 2025, Ivanhoe Company granted stock options to officers and key employees for the purchase of 19400 shares of the company's $1 par value common stock at $20 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a five year period beginning January 1, 2028 by grantees still employed by Ivanhoe. The Black-Scholes option-pricing model determined total compensation expense to be $188700. The market price of common stock was $26 per share at the date of grant. The journal entry to record the compensation expense related to these options for 2025 would include a credit to the Paid-in Capital- Stock Options account for $62900. O $37740. O $38800. O $0.
On January 1, 2019, a company granted 10,000 options to key executives. Each option allows the executive to purchase one share of the company’s $5 par value common stock at a price of $20 per share. The options were exercisable within a 7-year period beginning January 1, 2022, if the grantee is still employed by the company at the time of the exercise. On the grant date, a fair value option-pricing model determines total compensation to be $792,000. How much compensation expense should be recorded on 12/31/2020? If no compensation expense should be recorded on 12/31/2020, please enter 0. Rounded to the nearest dollar, if necessary.
On January 1, 2024, Donnelly Company granted 97,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2026, and expire on January 1, 2030. Each option can be exercised to acquire one share of $1 par common stock for $9. An option-pricing model estimates the fair value of the options to be $3 on the date of grant. What amount should Donnelly recognize as compensation expense for 2024? Note: Round your answer to the nearest dollar amount.
In order to retain certain key executives, Sheridan Company granted them incentive stock options on December 31, 2020. 144000 options were granted at an option price of $35 per share. Market prices of the stock were as follows: December 31, 2021$44 per share December 31, 202249 per share The options were granted as compensation for executives’ services to be rendered over a two-year period beginning January 1, 2021. The Black-Scholes option pricing model determines total compensation expense to be $1508000. What amount of compensation expense should Sheridan recognize as a result of this plan for the year ended December 31, 2021 under the fair value method? A. $1508000 B. $2633000 C. $754000 D. $1658000
On January 1, 2022, Wildhorse Corp. granted stock options for 71000 shares of its $10 par value common stock to key employees. The market price of the common stock on that date was $23 per share and the option price was $20. The Black-Scholes option pricing model determined total compensation expense to be $636000. The options are exercisable beginning January 1, 2025, provided those key employees are still in Wildhorse's employ at the time. The options expire on January 1, 2026. The amount of compensation expense Wildhorse should record for 2024 under the fair value method is O $0. O $318000. O $106000. O $212000.
On January 1, 2021, Major Corp. granted its employees an option to purchase 5,000 of Major's common shares at $50 per share. The Black-Scholes option pricing model determined total compensation expense to be $225,000. The option is exercisable on December 31, 2022, after employees complete two years of service. The market price of Major's shares on December 31, 2021 was $52. For December 31, 2021, Major should recognize compensation expense of: Question 10 options: $10,000 $112,500 $250,000 $225,000 On December 1, 2021, Parfait Ltd. borrowed $180,000 from a local bank by signing a four-month, 5% interest bearing note. All payments will be made at the note's maturity date. Assuming Parfait has a December 31 year-end, the adjusting journal entry on December 31 will include a: Question 1 options: debit to Interest payable of $750. credit to Notes Payable of $750…
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1.On January 1, 2019, a company granted 100,000 options to key executives. Each option allows the executive to purchase one share of the company's $14 par value common stock at a price of $44 per share. The options were exercisable within a 2-year period beginning January 1, 2022. On the grant date, a fair value option-pricing model determines total compensation to be $800,000. On January 1, 2022, 1,000 options were exercised. In the journal entry to record the exercise, how much should be recorded for Paid-in Capital in Excess of Par – common stock? 2.A company issued 13,000 shares of $22 par value common stock upon conversion of 24,000 shares of $34 par value preferred stock. The preferred stock was originally issued at $43 per share. The common stock is trading at $22 per share at the time of conversion. In the journal entry to record the conversion of the preferred stock, how much should we record for Paid-in Capital in Excess of Par - common stock?
On January 1, 2024, Jingrong Corporation granted stock options to key employees for the purchase of 81,000 shares of the company's common stock at $28 per share. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning January 1, 2026, by the grantees still in the employ of the company. No options were terminated during 2024, but the company does have an experience of 6% forfeitures over the life of the stock options. The market price of the common stock was $34 per share at the date of the grant. Jingrong Corporation used the Binomial pricing model and estimated the fair value of each of the options at $10. What amount should Jingrong charge to compensation expense for the year ended December 31, 2024? Multiple Choice $405,000 $810,000 $380,700 $761,400
On the first day of 2021, Northrop granted stock options to key employees for the purchase of 86,000 shares of the company's common stock at $27 per share. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning January 1, 2023, by the grantees still in the employ of the company. No options were terminated during 2021, but the company does have an experience of 6% forfeitures over the life of the stock options. The market price of the common stock was $33 per share at the date of the grant. Northrop used the Binomial pricing model and estimated the fair value of each of the options at $10. What amount should Northrop charge to compensation expense for the year ended December 31, 2021? Multiple Choice $430,000. $404,200. $808,400.