Question: On January 1 2009 Scooby Corporation granted 10 000 options to

On January 1, 2009, Scooby Corporation granted 10,000 options to key executives. Each option allows the executive to purchase one share of Scooby’s $5 par value ordinary shares at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2011, if the grantee is still employed by the company at the time of the exercise. On the grant date, Scooby’s shares were trading at $25 per share, and a fair value option- pricing model determines total compensation to be $450,000. On May 1, 2011, 9,000 options were exercised when the market price of Scooby’s shares were $30 per share. The remaining options lapsed in 2013 because executives decided not to exercise their options.

Prepare the necessary journal entries related to the share-option plan for the years 2009 through 2013.

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  • CreatedJune 17, 2013
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