Using the information from BE 19-9. now assume that the stock appreciation rights are settled for stock.

Question:

Using the information from BE 19-9. now assume that the stock appreciation rights are settled for stock. Prepare the journal entries to record the SAR plan. The par value of common stock is $1 per share. What journal entry will the company make not the date the employees purchase the shares?

Data from BE 19-9

Togo Incorporation started a share appreciation plan on January 1, 2018, when it granted 50,000 rights to its executives. The vesting period is 2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2020. The fair value of Togo's SARs for the years ended December 31, 2018 and 2019, are as follows:
Date Fair Value
December 31, 2018 ......................... $6
December 31, 2019 ......................... $7
All rights are exercised on January 1, 2020, when their fair value is $7 and the market price of the stock is $35 per share.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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