Practice Exercises - Stock Options On November 1, 2020, Pronghorn Company adopted a stock-option plan that granted options to key executives to purchase 38,100 shares of the company's $10 par value common stock. The options were granted on January 2, 2021 and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $571,500. All of the options were exercised during the year 2023: 25,400 on January 3 when the market price was $67, and 12,700 on May 1 when the market price was $76 a share. Prepare journal entries relating to the stock option plan for the years 2021, 2022, and 2023. Assume that the employee performs services equally in 2022 and 2023. General Journal Debit Credit 4.
Practice Exercises - Stock Options On November 1, 2020, Pronghorn Company adopted a stock-option plan that granted options to key executives to purchase 38,100 shares of the company's $10 par value common stock. The options were granted on January 2, 2021 and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $571,500. All of the options were exercised during the year 2023: 25,400 on January 3 when the market price was $67, and 12,700 on May 1 when the market price was $76 a share. Prepare journal entries relating to the stock option plan for the years 2021, 2022, and 2023. Assume that the employee performs services equally in 2022 and 2023. General Journal Debit Credit 4.
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 5MC
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