On January 1, 2019, 20,000 share options were awarded to the employee group with an exercise price
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Question:
On January 1, 2019, 20,000 share options were awarded to the employee group with an exercise price of $26 per share. No further options have been issued.
• The fair value of the share options was assessed by a consultant using an options pricing model to be $3 each on the grant date.
• Options are first exercisable on January 1, 2022, so a service life of three years is being used.
• The compensation expense recorded for this share option plan was $19,000 in 2019 based on the estimated forfeiture rate at that time.
• At December 31, 2020, the forfeiture rate was estimated to be 8% and the market price per share is $27. prepare the year end journal entry for the employee share option plan for 2020.
Expert Answer:
Number of share options 20000 Exercise Price 26 Fair value on grant date 3 per option Service period ... View the full answer
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