2. The following events occurred at Charlotte Company surrounding stock options. Charlotte uses the fair value...
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2. The following events occurred at Charlotte Company surrounding stock options. Charlotte uses the fair value method of accounting for stock options. a. On 1/1/18 options were granted to each of four executives to purchase 5,000 shares (a total of 20,000 shares) of the company's $2 par value common stock at a price of $30. The options were non-transferable and the executive had to remain an employee of the company through 12-31-19 to exercise the options. The options expire on 2/1/20. The Black-Scholes option pricing model determines the fair value of the options to be $1,500,000. b. On 4/5/19, one of the four executives resigned from the company. c. On 2/1/20, the remaining three executives exercised their options. Required: Prepare any necessary entries for 1/1/18, 12/31/18, 4/5/19, 12/31/19 and 2/1/20. If no entry is necessary, indicate as such. 2. The following events occurred at Charlotte Company surrounding stock options. Charlotte uses the fair value method of accounting for stock options. a. On 1/1/18 options were granted to each of four executives to purchase 5,000 shares (a total of 20,000 shares) of the company's $2 par value common stock at a price of $30. The options were non-transferable and the executive had to remain an employee of the company through 12-31-19 to exercise the options. The options expire on 2/1/20. The Black-Scholes option pricing model determines the fair value of the options to be $1,500,000. b. On 4/5/19, one of the four executives resigned from the company. c. On 2/1/20, the remaining three executives exercised their options. Required: Prepare any necessary entries for 1/1/18, 12/31/18, 4/5/19, 12/31/19 and 2/1/20. If no entry is necessary, indicate as such.
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Answer 2 journal entry Date 1120 Employee particulars Compensation Exp Employee stock option 12312... View the full answer
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