1. Sunland Ltd. has an executive stock option plan, details of which follow:

		The plan entitles the CEO to purchase 9,800 common shares at $24 each, following a vesting period.
		The vesting period is January 1, 2020 through December 31, 2021.
		The exercise period is January 1, 2022 through December 31, 2022.
		The CEO exercises 8,400 of the stock options on June 30, 2022. The rest of the options are allowed to lapse.
		The shares market prices per share are as follows:

Sunland uses an option-pricing model to value the stock options. When granted, the options are estimated to have a fair value of $5 each. This estimate remains unchanged during the vesting period. Assuming that Sunland has a December 31 year end, prepare the required journal entries as at the following dates.

2. Buffalo Ltd. sold 10-year, 5% convertible bonds with face value $ 1,530,000. The bonds pay interest December 31 each year. Buffalo follows ASPE. Each bond was convertible into 510 Buffalo common shares. The sale resulted in a value for the convertible option of $ 309,000. On January 2, 2021, Buffalo offered a cash payment of $ 33,000 to bondholders if they would convert their bonds into common shares. All of the bondholders agreed. At the time, the market value of the bonds was $ 1,294,000 and the carrying value on Buffalos books was $ 1,276,000. Prepare the journal entry to record the early retirement of the bonds.

3. Carla Vista Corp., a public company, adopted a stock option plan on November 30, 2020, that designated 70,000 common shares as available for the granting of options to officers of the corporation at an exercise price of $8 a share. The market value was $12 a share on November 30, 2020. On January 2, 2021, options to purchase 27,000 shares were granted to President Don Pedro: 15,000 for services to be rendered in 2021, and 12,000 for services to be rendered in 2022. Also on that date, options to purchase 17,000 shares were granted to Vice-President Beatrice Leonato: 8,500 for services to be rendered in 2021, and 8,500 for services to be rendered in 2022. The shares market value was $14 a share on January 2, 2021. The options were exercisable for a period of one year following the year in which the services were rendered. On January 2, 2021, the value of the options was estimated at $400,000. In 2022, neither the president nor the vice-president exercised their options because the shares market price was below the exercise price. The shares market value was $7 a share on December 31, 2022, when the options for 2021 services lapsed. On December 31, 2023, both the president and vice-president exercised their options for 12,000 and 8,500 shares, respectively, when the market price was $16 a share. The companys year end is December 31. Prepare the necessary journal entries in 2020 when the stock option plan was adopted, in 2021 when the options were granted, in 2022 when the options lapsed, and in 2023 when the options were exercised.

4. Cheyenne Corporation sold 20-year, 6% convertible bonds with face value $1,000,000. The bonds pay interest December 31 each year. Each bond was convertible into 150 Cheyenne common shares. The sale resulted in a value for the convertible option of $273,856. On January 2, 2021, Cheyenne offered the bondholders a price of 123 if they would agree to retire the bonds early. All of the bondholders agreed. At the time, the market value of the bonds was $786,816 and the carrying value on Cheyennes books was $766,416. Prepare the journal entry to record the early retirement of the bonds.

5. Stellar Inc. has an executive stock option plan, details of which follow:

		The plan entitles the President to purchase 60,400 common shares at $51.00 after a two-year vesting period that begins on the grant date of January 1, 2020.
		The President can exercise the stock options any time between January 1, 2022 and December 31, 2026.
		The President exercises 48,400 of the stock options on June 30, 2022. The rest of the options are allowed to lapse.
		The shares market prices per share are as follows:

Stellar uses an option-pricing model to value the stock options. When granted, the options are estimated to have a fair value of $9.90 each. This estimate remains unchanged during the vesting period. Assuming that Stellar has a December 31 year end, prepare the required journal entries as at the following dates.