Prepare the necessary journal entry assuming that all the options granted by On-the-Fly in BE19-5 expired and were not exercised by any of the company’s employees.
In BE19-5
On-the-Fly Limousine Services granted 5,000 options to acquire 5,000 shares of its $ 1 par value common stock. At the grant date, the fair value of the options is $ 100,000 and the exercise price per option is $ 8 each. Assuming that employees exercise all the options at the end of the service period, prepare the journal entry necessary to record the exercise of the options.