Journal entries for employee stock options. Vertovec Corporation grants 20,000 stock options to its managerial employees on December 3 1 , Year 3. to purchase 20,000 shares of its common stock ($10 par value) for $25 per share. A financial consulting tiim estimates that the market vakie of these options on the grant date is $100,000. On October 15, Year 5. holders of 15,000 options exercise their option at a time when the market price of the stock is $30 per share. On November 30, Year 6. holders of the remaming options exercise them at a time when the market price of the stock is $34 per share.

a. Present journal entries to record these transactions, under GAAP, on December 31, Year 3; October 15, Year 5; and November 30, Year 6.

b. Repeat part a following the currently allowable, but infrequently used, procedure of recording compensation on the grant date.

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