Nadal Company has 20 executives to whom it grants compensatory share options on January 1, 2019. At
Question:
Nadal Company has 20 executives to whom it grants compensatory share options on January 1, 2019. At that time, it grants each executive the right to purchase 100 shares of its $5 par common stock at $40 per share after a 3-year service period. The value of each option is estimated to be $10.25 on the grant date. Based on its average employee turnover rate each year, Nadal expects that 2 executives will not vest in the plan. At the end of 2021, Nadal confirms that the actual turnover was the same as expected. On January 5, 2022, 3 executives exercise their options.
Required:
Prepare Nadal’s memorandum entry on the grant date and journal entries for 2019 through 2022 in regard to its compensatory share option plan (round all calculations to the nearest whole number).
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...
Step by Step Answer:
Intermediate Accounting Reporting and Analysis
ISBN: 978-1337788281
3rd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach