Chapter 19 homework Submitted 86.25/100 Total points awarded Help Exit Brief Exercise 19-9 (Algo) Performance-based options [LO19-2] 6 On January 1, 2021, Farmer Fabrication issued stock options for 260,000 shares to a division manager. The options have an estimated fair value of $7 each. To provide additional Incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in four years. Suppose that after one year, Farmer estimates that it is not probable that divisional revenue will increase by 5% in four years. 1.06/6.25 points awarded Scored Required: 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2022? 3. What journal entry will be needed to account for the options in 2022? eBook Complete this question by entering your answers in the tabs below. Print Reg 1 and 2 Req3 References What is the revised estimate of the total compensation and what action will be taken to account for the options in 2022? 1. Estimated total compensation What journal entry will be needed to account for the options in 2022? 2. 1,820,000 Farmer will reverse the 2021 recorded compensation Chapter 19 homework i Submitted 86.25/100 Total points awarded Help Exit Brief Exercise 19-9 (Algo) Performance-based options (L019-2] 6 1.06/6.25 points awarded Scored On January 1, 2021, Farmer Fabrication issued stock options for 260,000 shares to a division manager. The options have an estimated fair value of $7 each. To provide additional Incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in four years. Suppose that after one year, Farmer estimates that it is not probable that divisional revenue will increase by 5% in four years. Required: 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2022? 3. What journal entry will be needed to account for the options in 2022? eBook Complete this question by entering your answers in the tabs below. Print Req 1 and 2 Reg 3 References What journal entry will be needed to account for the options in 2022? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) No Date Credit Debit 1,213,333 1 General Journal Compensation expense Paid-in capital - stock options 2022 1.213,333