25. In order to encourage employee ownership of the company's $1 par common shares, Trueblood Radiocom Co. permits any of its employees to buy shares directly from the company through payroll deduction. An employee must decide whether or not to participate within one week after the share price is fixed. There are no brokerage fees and employees purchase shares at a 15% discount, which Radiocom has justified as reasonable. During July, employees purchased 200,000 shares at a time when the market price of the shares on the New York Stock Exchange was $50 per share. Which summary journal entry below should Trueblood's accountant make to record the July purchases? a. Cash 8,500,000 Compensation expense 1,500,000 Common stock, $1 par 200,000 Paid-in capital, excess of par 9,800,000 b. 8,500,000 Cash Common stock, $1 par Paid-in capital, excess of par 200,000 8,300,000 C. 1,500,000 8,500,000 Paid-in capital, employee purchases Cash Common stock, $1 par Paid-in capital, excess of par 200,000 9,800,000 d. None of these answers are correct. 26. (CPA adapted) The measurement date for the fair value of stock options granted to an executive is a. the last day of the vesting period b. the day the options are granted c. the day the options are exercised d. the day that management determines the executive will not have to forfeit the options 27. During closing of the books and production of the financial statements, the accounting intern at Leiter Industries was assigned to compute basic and diluted EPS. Which of the items below should the intern not include when computing diluted earnings per share? a. The weighted average of common shares b. Interest that would not be paid out if all convertible bonds were converted to common shares C. Dividends paid on common shares d. The preferred dividends that would not be paid out if convertible preferred stock were converted to common shares e. All of these items should be included in the computation of diluted EPS. _basic EPS and 28. When a company issues common stock during the year, the overall effect is to __ diluted EPS. a. increase, increase b. decrease, increase c. increase, decrease d. decrease, decrease