At January 1, 2021, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows: Vesting Date Amount Vesting Fair Value per Option Dec. 31, 2021 20 % 2$ Dec. 31, 2022 30 % %24 8 Dec. 31, 2023 50 % $ 12 What is the compensation expense related to the options to be recorded in 2021? O $48,000. $96,000. O $128,000. O $184,000.

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 7RE: On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25...
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At January 1, 2021, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of
stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair
value of the options is estimated as follows:
Vesting Date
Amount Vesting
Fair Value per Option
Dec. 31, 2021
20 %
2$
Dec. 31, 2022
30 %
2$
8
Dec. 31, 2023
50 %
$
12
What is the compensation expense related to the options to be recorded in 2021?
O $48,000.
$96,000.
O $128,000.
O $184,000.
Transcribed Image Text:At January 1, 2021, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows: Vesting Date Amount Vesting Fair Value per Option Dec. 31, 2021 20 % 2$ Dec. 31, 2022 30 % 2$ 8 Dec. 31, 2023 50 % $ 12 What is the compensation expense related to the options to be recorded in 2021? O $48,000. $96,000. O $128,000. O $184,000.
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