On January 1, 2016, D Corp. granted an employee an option to purchase 6,000 shares of D's
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On January 1, 2016, D Corp. granted an employee an option to purchase 6,000 shares of D's $4 par common stock at $19 per share. The options became exercisable on December 31, 2017, after the employee completed two years of service. The option was exercised on January 10, 2018. The market prices of D's stock were as follows: January 1, 2016, $36; December 31, 2017, $51; and January 10, 2018, $44. An option pricing model estimated the value of the options at $9 each on the grant date. For 2016, D should recognize compensation expense of:
A. $ 0.
B. $21,000.
C. $27,000.
D. $108,000.
Related Book For
Fundamentals of Taxation 2017
ISBN: 9781259752735
10th edition
Authors: Ana Cruz, Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler, Jinhee Trone
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