Johnstown Company granted $10$ officers rights to buy $10,000$ shares each of common stock $$1$ par, at $$15$ per share on May $1,2024,$ the grant date. The stock was selling for $$10$ per share at the time. The rights cannot be exercised until the beginning of $2026$ and expire at the end of $2029.$ Compensation expense is $$90,000,$ covering a one year period of $2025.$

$$Record the following:

Dr$.$Cr$.$May $1,2024,$ the grant date, issue of the rights.

Dec. $31,2025,$ compensation expense Jul. $1,2027,80\%$ of the rights were exercised, as the stock climbed to $$20$ per share.

Dec. $31,2028,10\%$ of the rights expired because one officer left the company.

On December $31,2029,10\%$ of the rights expired because one officer decided not to exercise the right.  

 

 

Answer rating: 100% (QA)

1 May 1 2024 Grant Date Issue of Rights Johnstown Company grants 10 officers the right to buy 10000 shares each of common stock at 1 par value with an ... View the full answer