On January 1, 2006, as a form of executive compensation, Wadlin Corporation grants share appreciation rights to

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On January 1, 2006, as a form of executive compensation, Wadlin Corporation grants share appreciation rights to Robert Brandt. These rights entitle Brandt to receive cash equal to the excess of the quoted market price over a $20 option price for 4,000 shares of the company’s common stock on the exercise date. The service period is three years (which Brandt is expected to complete) and the rights must be exercised within five years. Brandt exercises his rights on December 31, 2009. The fair value per SAR was as follows: 12/31/06, $3.00; 12/31/07, $4.20; 12/31/08, $4.00; and 12/31/09, $5.00. The quoted market price per share of common stock was $25 on December 31, 2009.

Required
1. Prepare a schedule to compute the compensation expense related to this SAR plan for 2006 through 2009.
2. Prepare the December 31, 2009 journal entry related to this SAR plan.

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...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Intermediate Accounting

ISBN: 978-0324300987

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

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