Concept explainers
a.
To prepare: The
Giveninformation:
Number of shares as an option is10,000.
Par value of common stock is $2.
Exercise price per share is $18.
Vesting time period is 2 years.
Estimated fair value at the grant date is $250,000
Initial vesting probability is 100%.
b.
To prepare: The journal entries forrecording of compensation expense over the vesting period.
Given information:
Number of shares as an option is 10,000
Par value of common stock is $2.
Exercise price per share is $18.
Vesting time period is 2 years.
Estimated fair value at the grant date is $250,000
Initial vesting probability of year 1 is 100%.
Vesting probability of year 2 is 60%.
c.
The journal entries related to recording of expiration of all options.
Given information:
Number of shares as an option is 10,000.
Par value of common stock is $2.
Exercise price per share is $18.
Vesting time period is 2 years.
Estimated fair value at the grant date is $250,000
Initial vesting probability of year 1 is 100%.
Vesting probability of year 2 is 60%.
d.
To prepare: The journal entries for recording of compensation expense over the vesting period.
Given information:
Number of shares as an option is 10,000
Par value of common stock is $2.
Exercise price per share is $18.
Vesting time period is 2 years.
Estimated fair value at the grant date is $250,000
Initial vesting probability of year 1 is 80%.
Vesting probability of year 2 is 80%.
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Check out a sample textbook solutionChapter 19 Solutions
Intermediate Accounting (2nd Edition)
- On January 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the time-vested restricted share units entitles the CFO to receive one share of Brust common stock if she remains an employee of the company for 4 years. On January 2, 2019, shares of Brusts 1 par value common are trading at 29.50 per share. The company estimates that the CFO will complete all 4 years of required service with the company. Prepare the journal that Brust should make each year to account for the restricted share units.arrow_forwardComprehensive Young Corporation has been operating successfully for several years. It is authorized to issue 24,000 shares of no-par common stock and 6,000 shares of 8%, 100 par preferred stock. The Contributed Capital section of its January 1, 2019, balance sheet is as follows: Part a. A shareholder has raised the following questions: 1. What is the legal capital of the corporation? 2. At what average price per share has the preferred stock been issued? 3. How many shares of common stock have been issued (the common stock has been issued at an average price of 23 per share)? Part b. The company engaged in the following transactions in 2019: Required: 1. Answer the questions in Part a. 2. Prepare journal entries to record the transactions in Part b. 3. Prepare the Contributed Capital section of Youngs December 31, 2016, balance sheet.arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningIndividual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT