On January 1, 2019, as a form of executive compensation, Wadlin Corporation grants share appreciation rights to Robert Brandt. These rights entitle Brandt to receive cash equal to the excess of the quoted market price over a $20 option price for 7,000 shares of the company’s common stock on the exercise date. The service period is 3 years (which Brandt is expected to complete), and the rights must be exercised within 5 years. Brandt exercises his rights on December 31, 2022. The fair value per SAR was as follows: 12/31/19, $3.00; 12/31/20, $4.20; 12/31/21, $4.00; and 12/31/22, $5.00. The quoted market price per share of common stock was $25 on December 31, 2022. Required: 1. Prepare a schedule to compute the compensation expense related to this SAR plan for 2019 through 2022. 2. Prepare the December 31, 2022, journal entry related to this SAR plan
On January 1, 2019, as a form of executive compensation, Wadlin Corporation grants share appreciation rights to Robert Brandt. These rights entitle Brandt to receive cash equal to the excess of the quoted market price over a $20 option price for 7,000 shares of the company’s common stock on the exercise date. The service period is 3 years (which Brandt is expected to complete), and the rights must be exercised within 5 years. Brandt exercises his rights on December 31, 2022. The fair value per SAR was as follows: 12/31/19, $3.00; 12/31/20, $4.20; 12/31/21, $4.00; and 12/31/22, $5.00. The quoted market price per share of common stock was $25 on December 31, 2022. Required: 1. Prepare a schedule to compute the compensation expense related to this SAR plan for 2019 through 2022. 2. Prepare the December 31, 2022, journal entry related to this SAR plan
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 8RE: On January 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the...
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On January 1, 2019, as a form of executive compensation, Wadlin Corporation grants share appreciation rights to Robert Brandt. These rights entitle Brandt to receive cash equal to the excess of the quoted market price over a $20 option price for 7,000 shares of the company’s common stock on the exercise date. The service period is 3 years (which Brandt is expected to complete), and the rights must be exercised within 5 years. Brandt exercises his rights on December 31, 2022. The fair value per SAR was as follows: 12/31/19, $3.00; 12/31/20, $4.20; 12/31/21, $4.00; and 12/31/22, $5.00. The quoted market price per share of common stock was $25 on December 31, 2022.
Required:
| 1. | Prepare a schedule to compute the compensation expense related to this SAR plan for 2019 through 2022. |
| 2. | Prepare the December 31, 2022, |
Expert Solution
Step 1
SAR refers to Share Appreciation Rights.
SAR is an added benefit given to employees to have right over the shares.
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