On January 1,2017, Carolina Company granted Andy Eggers, an employee, options to buy 2,000,000 shares of Carolina
Question:
On January 1,2017, Carolina Company granted Andy Eggers, an employee, options to buy 2,000,000 shares of Carolina Company stock for $25 per share, the option exercisable for 5 years from the end of the service period. The service period is for 3 years beginning January 1,2017. The par value of Carolina's common stock is $1 per share. Using the fair value option pricing model, total compensation expense is determined to be $21,000,000. Eggers exercised options to purchase all 2,000,000 shares on September 1,2020, when the market price was $34 per share. As a result of the Exercise of Eggers' options. Carolina' Journal entry should include:
a. Debit $50,000,000 to Cash, Credit $21,000,000 to paid-in capital- stock options
b. Debit $68,000,000 to Cash, Credit $21,000,000 to paid-in capital- stock options
a. Debit $50,000,000 to Cash, Debit $21,000,000 to paid-in capital- stock options
a. Debit $68,000,000 to Cash, Debit $21,000,000 to paid-in capital- stock options
Expert Answer:
Answer a Debit 50000000 to Cash Credit 21000000 to paidin capital stock options As at the d... View the full answer
Financial Accounting Theory and Analysis Text and Cases
ISBN: 978-1118582794
11th edition
Authors: Richard G. Schroeder, Myrtle W. Clark, Jack Cathey
