On January 1, 2018, Thomasburg Inc. granted stock options to officers and key employees for the purchase
Question:
On January 1, 2018, Thomasburg Inc. granted stock options to officers and key employees for the purchase of 200,000 of the company’s no par value common shares at $25 each. The options were exercisable between January 1, 2020, and December 31, 2024, by grantees still employed by the company. The market price of Thomasburg’s common shares was $20 per share at the date of grant. Using the Black–Scholes option pricing model, the company estimated the value of each option on January 1, 2018, to be $3.
On March 31, 2020, 120,000 options were exercised when the market value of the company’s common shares was $40 per share. The remainder of the options expired unexercised. The company has a December 31 year-end.
Required:
Record the journal entries for Thomasburg’s stock options.
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