As part of its stock-based compensation package, International Electronics (IE) granted 16 million stock appreciation rights...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
As part of its stock-based compensation package, International Electronics (IE) granted 16 million stock appreciation rights (SARS) to top officers on January 1, 2021. At exercise, holders of the SARS are entitled to recelve stock equal in value to the excess of the market price at exercise over the share price at the date of grant. The SARS cannot be exercised until the end of 2024 (vesting date) and expire at the end of 2026. The $1 par common shares have a market price of $49 per share on the grant date. The fair value of the SARS, estimated by an appropriate option pricing model, is $3 per SAR at January 1, 2021. The fair value re-estimated at December 31, 2021, 2022, 2023, 2024, and 2025, is $4, $3, $4, $2.50, and $3, respectively. All recipients are expected to remain employed through the vesting date. Required: 1-a. Will the SARS be reported as debt or as equity? 1-b to 4. Prepare the appropriate journal entries pertaining to the SARS on January 1, 2021 and December 31, 2021-December 31, 2024. Assuming the SARS remain unexercised on December 31, 2025, prepare the appropriate entry. Prepare the entry when the SARS are exercised on June 6, 2026, when the share price is $50. Complete this question by entering your answers in the tabs below. Req 1A Req 18 to 4 Prepare the appropriate journal entries pertaining to the SARS on January 1, 2021 and December 31, 2021-December 31, 2024. Assuming the SARS remain unexercised on December 31, 2025, prepare the appropriate entry. Prepare the entry when the SARS are exercised on June 6, 2026, when the share price is $50. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal places (I.e., 5,500,000 should be entered as 5.50).) Show less a Vlew transaction list Journal entry worksheet 2 7 Record any necessary Journal entry on December 31, 2021 when the fair value of the SARS is estimated at $4 per SAR. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2021 As part of its stock-based compensation package, International Electronics (IE) granted 16 million stock appreciation rights (SARS) to top officers on January 1, 2021. At exercise, holders of the SARS are entitled to recelve stock equal in value to the excess of the market price at exercise over the share price at the date of grant. The SARS cannot be exercised until the end of 2024 (vesting date) and expire at the end of 2026. The $1 par common shares have a market price of $49 per share on the grant date. The fair value of the SARS, estimated by an appropriate option pricing model, is $3 per SAR at January 1, 2021. The fair value re-estimated at December 31, 2021, 2022, 2023, 2024, and 2025, is $4, $3, $4, $2.50, and $3, respectively. All recipients are expected to remain employed through the vesting date. Required: 1-a. Will the SARS be reported as debt or as equity? 1-b to 4. Prepare the appropriate journal entries pertaining to the SARS on January 1, 2021 and December 31, 2021-December 31, 2024. Assuming the SARS remain unexercised on December 31, 2025, prepare the appropriate entry. Prepare the entry when the SARS are exercised on June 6, 2026, when the share price is $50. Complete this question by entering your answers in the tabs below. Req 1A Req 18 to 4 Prepare the appropriate journal entries pertaining to the SARS on January 1, 2021 and December 31, 2021-December 31, 2024. Assuming the SARS remain unexercised on December 31, 2025, prepare the appropriate entry. Prepare the entry when the SARS are exercised on June 6, 2026, when the share price is $50. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal places (I.e., 5,500,000 should be entered as 5.50).) Show less a Vlew transaction list Journal entry worksheet 2 7 Record any necessary Journal entry on December 31, 2021 when the fair value of the SARS is estimated at $4 per SAR. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2021
Expert Answer:
Answer rating: 100% (QA)
Given that Electronics granted 16million Journal ENtry Worksheet DAte Gene... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson, Wayne Thomas
Posted Date:
Students also viewed these accounting questions
-
As part of its stock-based compensation package, International Electronics granted 24 million stock appreciation rights (SARs) to top officers on January 1, 2018. At exercise, holders of the SARs are...
-
As part of its business, Kinkos Graphics Corporation (Kinkos) copied excerpts from books, compiled them in packets, and sold the packets to college students. Kinkos did this without permission from...
-
As part of its stock-based compensation package, International Electronics granted 24 million stock appreciation rights (SARs) to top officers on January 1, 2011. At exercise, holders of the SARs are...
-
Private carriage is more important in the motor carrier segment of our transportation industry than any of the other four major modal segments. What factors have contributed to private carriage...
-
Is the economic entity or the parent concept more consistent with the principles addressed in the FASB's conceptual framework? Explain your answer.
-
The data to be explained here are the reports of the mapping of radiation in the entire cosmos. Two conflicting theories about the size and shape of the universe are offered to account for the...
-
A critical width dimension on an integrated circuit board was measured on 100 boards. The ordered measurements are: Given the specification limits \(L S L=2.496\) and \(U S L=2.516\), evaluate the...
-
High school seniors with strong academic records apply to the nations most selective colleges in greater numbers each year. Because the number of slots remains relatively stable, some colleges reject...
-
A block of mass=315g is dragged with a string across a rough horizontal table. The string tension is=2.97,and it pulls upward at an angle of 46.0 with the horizontal. At one particular instant, the...
-
Consider the data below that shows the forecast for the number of cars sold by an electric car maker for each quarter for the next 5 years. The table below also shows the parameters for the...
-
YouTube URL: http://www.youtube.com/watch?v=xNLbPPZ4iSM Read the Article. Answer the following Questions - Your answers should align to the iogo IMC campaign. #1: IMC planning is designed to make...
-
Statement 1 . When demand is inelastic and price is lowered, total revenue will rise. Statement 2. Demand is unit elastic when elasticity is one. a) Statement 1 is true, and statement 2 is false. b)...
-
What happens to interest rates when the demand for money rises? _______.
-
Interest rates are set by _______and _________.
-
Elasticity of demand is a measure of ________the responsiveness of to changes in price.
-
Price floors and price ceilings are set by ______.
-
Using a mapping service to obtain distances, create a weighted complete graph with the following locations as vertices: Your place of residence Your place of employment or local large business...
-
Explain why it is not wise to accept a null hypothesis.
-
A New York City daily newspaper called Manhattan Today charges an annual subscription fee of $135. Customers prepay their subscriptions and receive 260 issues over the year. To attract more...
-
Air FranceKLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AFs financial statements and disclosure notes for the year...
-
At January 1, 2021, Caf Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $25,000 beginning January 1,...
-
Explain the building blocks of accounting: ethics, principles, and assumptions.
-
On May 1, 2025, Park Flying School Ltd., a company that provides flying lessons, was started with an investment of 45,000 cash in the business. Following are the assets and liabilities of the company...
-
The historical cost basis results in: a. initially recording assets at cost and adjusting when the current value changes. b. keeping activities of an entity separate and distinct from its owner. c....
Study smarter with the SolutionInn App