Using information in question 3, which is the correct entry to record the exercise of 90% of
Question:
Using information in question 3, which is the correct entry to record the exercise of 90% of the options on April 15, 2018 when the market price of the stock was $8?
Select one:
a. Cash 270,000
Paid in capital for stock options 60,000
Common stock 12,000
Paid in capital in excess of par 318,000
b. Cash 270,000
Common stock 10,800
Paid in capital in excess of par 259,200
c. Cash 270,000
Paid in capital for stock options 54,000
Common stock 10,800
Paid in capital in excess of par 313,200
d. Cash 486,000
Common stock 10,800
Paid in capital in excess of par 475,200
03. Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2015, options were granted for sixty thousand $0.2 par common shares. The exercise price, $5, equals the market price of the common stock on the grant date. The options cannot be exercised before January 1, 2018, and expire December 31, 2021. Each option has a fair value of $1 based on an option pricing model.
Which is the correct entry to record compensation expense for the year 2015?
Select one:
a. Compensation Expense 60,000
Paid in capital for stock options 60,000
b. Compensation Expense 20,000
Common stock for stock options 20,000
c. Compensation Expense 20,000
Paid-in capital for stock options 20,000
d. No entry needed due to the compensation cost of these options is zero.
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng