On May 1, 2021, Roger Rabbit Company adopted a stock-option plan that granted options to key executives to purchase 8,000 shares of the company's $10 par valu common stock. The options were granted on January 1, 2022 and were exercisable years after the date of grant if the grantee was still an employee of the company. T options expired 5 years from date of grant. The option price was set at $30, and th fair value option-pricing model determines the total compensation expense to be $189 000
On May 1, 2021, Roger Rabbit Company adopted a stock-option plan that granted options to key executives to purchase 8,000 shares of the company's $10 par valu common stock. The options were granted on January 1, 2022 and were exercisable years after the date of grant if the grantee was still an employee of the company. T options expired 5 years from date of grant. The option price was set at $30, and th fair value option-pricing model determines the total compensation expense to be $189 000
Financial Accounting Intro Concepts Meth/Uses
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Author:Weil
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Chapter15: Shareholders’ Equity: Capital Contributions And Distributions
Section: Chapter Questions
Problem 30P
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On May 1, 2021, Roger Rabbit Company adopted a stock-option plan that granted
options to key executives to purchase 8,000 shares of the company's $10 par value
common stock. The options were granted on January 1, 2022 and were exercisable 2
years after the date of grant if the grantee was still an employee of the company. The
options expired 5 years from date of grant. The option price was set at $30, and the
fair value option-pricing model determines the total compensation expense to be
$189,000.
All of the options were exercised during the year 2024: 3,400 on January 3 when the
market price was $38, and 4,600 on May 1 when the market price was $42 a share.
Prepare journal entry relating to the stock option plan for the year 2023. Assume
that the employee performs services equally in 2022 and 2023.
O Debit Compensation Expense $94,500; Credit Paid-in Capital-Stock Options $94,500
O Debit Compensation Expense $189,000; Credit Paid-in Capital-Stock Options $189,000
O Debit Credit Paid-in Capital-Stock Options $189,000; Credit Compensation Expense
$189,500
O Debit Credit Paid-in Capital-Stock Options $94,500; Credit Compensation Expense $94,500
ASA
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