On January 1, 2021 Taffy Inc. granted 210,000 stock appreciation rights (SARS) to its executives. Each...
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On January 1, 2021 Taffy Inc. granted 210,000 stock appreciation rights (SARS) to its executives. Each SAR entitled its holder to receive cash equal to the difference between the market price of the common share and the benchmark price of $16. The SARS vested after three years and expired on Dec. 31, 2026. On January 1, 2024, 100,000 SARS are exercised. The market price of the shares remained at $20, On January 1, 2025, 50,000 SARS are exercised. The market price of the shares remained at $22. The remaining SARS expired. Pertinent stock-related data are listed below: 6-20: 4x too 000 Fair value each SAR Market price of share January 1, 2021 December 31, 2021 December 31, 2022 $16 S10 $21 S6 December 31, 2023 December 31, 2024 December 31, 2025 $18 $20 $22 $15 $7 S8 $1 December 31, 2026 S14 Required: a. Prepare the journal entry at December 31, 2021, to record compensation expense. Date Explanation/Account Debit Credit b. Prepare the journal entry at December 31, 2022, to record compensation expense. Date Explanation/Account Debit Credit c. Prepare the journal entry at December 31, 2023, to record compensation expense. Credit Debit Date Explanation/Account lal instrument Chapter 15 Assignment d. Prepare the journal entry at January 1, 2024, to record the partial exercise of the SARS. Credit Explanation/Account Debit Date e. Prepare the journal entry at December 31, 2024, to record compensation expense. Credit Date Explanation/Account Debit f. Prepare the journal entry at January 1, 2025, to record the partial exercise of the SARS. Date Explanation/Account Debit Credit g. Prepare the journal entry at December 31, 2025, to record compensation expense. Date Explanation/Account Debit Credit h. Prepare the journal entry at December 31, 2026, to record compensation expense. Date Explanation/Account Debit Credit Calculations: On January 1, 2021 Taffy Inc. granted 210,000 stock appreciation rights (SARS) to its executives. Each SAR entitled its holder to receive cash equal to the difference between the market price of the common share and the benchmark price of $16. The SARS vested after three years and expired on Dec. 31, 2026. On January 1, 2024, 100,000 SARS are exercised. The market price of the shares remained at $20, On January 1, 2025, 50,000 SARS are exercised. The market price of the shares remained at $22. The remaining SARS expired. Pertinent stock-related data are listed below: 6-20: 4x too 000 Fair value each SAR Market price of share January 1, 2021 December 31, 2021 December 31, 2022 $16 S10 $21 S6 December 31, 2023 December 31, 2024 December 31, 2025 $18 $20 $22 $15 $7 S8 $1 December 31, 2026 S14 Required: a. Prepare the journal entry at December 31, 2021, to record compensation expense. Date Explanation/Account Debit Credit b. Prepare the journal entry at December 31, 2022, to record compensation expense. Date Explanation/Account Debit Credit c. Prepare the journal entry at December 31, 2023, to record compensation expense. Credit Debit Date Explanation/Account lal instrument Chapter 15 Assignment d. Prepare the journal entry at January 1, 2024, to record the partial exercise of the SARS. Credit Explanation/Account Debit Date e. Prepare the journal entry at December 31, 2024, to record compensation expense. Credit Date Explanation/Account Debit f. Prepare the journal entry at January 1, 2025, to record the partial exercise of the SARS. Date Explanation/Account Debit Credit g. Prepare the journal entry at December 31, 2025, to record compensation expense. Date Explanation/Account Debit Credit h. Prepare the journal entry at December 31, 2026, to record compensation expense. Date Explanation/Account Debit Credit Calculations:
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