On January 1, 2020, Apple Corp. granted 100,000 nonqualified stock options with an estimated $20 fair value per option. Each option entitled the recipient to purchase one share of Apple stock for $200 a share (the per-share price of Apple stock on January 1, 2020, when the options were granted). The options vested at the end of the day on December 31, 2021.

No options were exercised in 2020 or 2021.

On March 1, 2022, employees exercised all 100,000 options at a time when Apple stock was trading at $250 per share.

• Calculate the Book and Tax deductions for each of the years 2020, 2021, and 2022.

Prepare the tax journal entries for each of the years 2020, 2021, and 2022.

Answer rating: 100% (QA)

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