Chapter 14 - Complex Debt and Equity Instruments 138. Assume that on January 1st, 20x1, Jane Smith is awarded units in an existing Phantom Stock Plan whereby she can receive either 20,000 common shares or a cash payout equivalent to the value of 15,000 shares at the time. The shares are worth $5 each upon the inception of the plan. The value of the shares rose to $8 and $10 each at the end of 201 and 202 respectively. Option valuation models valued the company's stock at $6 per share on January 1st,201. Jane is her company's only full-time employee currently eligible under this plan and she has signed a non-competition agreement which essentially forbids her from seeking employment elsewhere. Required: Provide the company's journal entries to record compensation expense for 201 and 202 and provide the necessary journal entries assuming that Jane: a. Elects to receive shares and b. Opts for the cash payment, allowing her options to expire