On November 1, 2020, DaBaby Company adopted a stock-option plan that granted options to key executives to purchase 42,500 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 $30, and the fair value option-pricing model determines the total compensation expense to be $210,000. All of the options were exercised during the year 2023: 20,100 on January 15 when the market price was $48, and 22,400 on June 1 when the market price was $56 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.
On November 1, 2020, DaBaby Company adopted a stock-option plan that granted options to key executives to purchase 42,500 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 $30, and the fair value option-pricing model determines the total compensation expense to be $210,000. All of the options were exercised during the year 2023: 20,100 on January 15 when the market price was $48, and 22,400 on June 1 when the market price was $56 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.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter15: Shareholders’ Equity: Capital Contributions And Distributions
Section: Chapter Questions
Problem 18E
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