On January 1, 2010, sixty executives are offered a fixed compensatory stock option plan n which each of them will receive options to buy 5,000 shares of $10 par common stock at $30 a share On the pant date, the fair value per option is $7 50 There is a three year service period and an estimated ann...

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On January 1, 2010, sixty executives are offered a fixed compensatory stock option plan n which each

Question:

On January 1, 2010, sixty executives are offered a fixed compensatory stock option plan n which each of them will receive options to buy 5,000 shares of $10 par at $30 a share. On the pant date, the fair value per option is $7.50. There is a three-year service period and an estimated annual employee turnover rate of 3%.
Required:
a. Gavle the expected total compensation cost.
b. Compute the compensation expense for 2011.
c. Prepare the journal entry to record the exercise of options by six of the executives of January 1, 2013.
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...