Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3. On January 1, 2022, Bob Co. granted compensatory stock options for 20,000 shares of its $20 par value common stock to certain of its

image text in transcribed
3. On January 1, 2022, Bob Co. granted compensatory stock options for 20,000 shares of its $20 par value common stock to certain of its key employees. The option price per share is $25. Using a fair value option pricing model, total compensation expense is determined to be $120,000. The options are exercisable beginning January 1, 2024, providing those key employees are still in the employ of the company at the time the options are exercised. The options expire on January 1, 2025. The service period is for two years beginning January 1, 2022. All 20,000 options were exercised on January 1, 2024. Required: a. Using the fair value method, prepare the journal entry to record compensation expense on December 31, 2022? b. Assuming all those key employees were still employed and all the options were exercised, prepare the journal entry to record the exercise of all 20,000 options on January 1, 2024

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Using QuickBooks Accountant 2018 For Accounting

Authors: Glenn Owen

16th Edition

0357042085, 9780357042083

More Books

Students also viewed these Accounting questions

Question

a. Did you express your anger verbally? Physically?

Answered: 1 week ago