On January 1, 2026, Waterway Inc. granted stock options to officers and key employees for the purchase of 24,000 shares of the company's $10 par common stock at $24 per share. The options were exercisable within a 5-year period beginning January 1, 2028, by grantees still in the employ of the company, and expiring December 31, 2032. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $359,400. On April 1, 2027, 2,400 options were terminated when the employees resigned from the company. The market price of the common stock was $34 per share on this date. On March 31, 2028, 14,400 options were exercised when the market price of the common stock was $39 per share. Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2026, 2027, and 2028. (List all debit entries before credit entries Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter Q for the amo
On January 1, 2026, Waterway Inc. granted stock options to officers and key employees for the purchase of 24,000 shares of the company's $10 par common stock at $24 per share. The options were exercisable within a 5-year period beginning January 1, 2028, by grantees still in the employ of the company, and expiring December 31, 2032. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $359,400. On April 1, 2027, 2,400 options were terminated when the employees resigned from the company. The market price of the common stock was $34 per share on this date. On March 31, 2028, 14,400 options were exercised when the market price of the common stock was $39 per share. Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2026, 2027, and 2028. (List all debit entries before credit entries Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter Q for the amo
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 30P
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Transcribed Image Text:Date
Account Titles and Explanation
Debit
Credit
Transcribed Image Text:On January 1, 2026, Waterway Inc. granted stock options to officers and key employees for the purchase of 24,000 shares of the
company's $10 par common stock at $24 per share. The options were exercisable within a 5-year period beginning January 1, 2028, by
grantees still in the employ of the company, and expiring December 31, 2032. The service period for this award is 2 years. Assume that
the fair value option-pricing model determines total compensation expense to be $359,400.
On April 1, 2027, 2,400 options were terminated when the employees resigned from the company. The market price of the common
stock was $34 per share on this date.
On March 31, 2028, 14,400 options were exercised when the market price of the common stock was $39 per share.
Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and
charges to compensation expense, for the years ended December 31, 2026, 2027, and 2028. (List all debit entries before credit entries
Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for
the account titles and enter O for the amounts. Record entries in the order displayed in the problem statement.)
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