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Exercise 19-7 Stock options;forfeiture of options [LO19-2] On January 1, 2018, Adams-Meneke Corporation granted 15 million incentive stock options to division managers, each permitting holders

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Exercise 19-7 Stock options;forfeiture of options [LO19-2] On January 1, 2018, Adams-Meneke Corporation granted 15 million incentive stock options to division managers, each permitting holders to purchase one share of the company's $1 par common shares within the next six years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, currently $12 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. Management's policy is to estimate forfeitures. No forfeitures are anticipated. Ignore taxes. Required: 1. Determine the total compensation cost pertaining to the options on January 1, 2018. 2. Prepare the appropriate journal entry to record compensation expense on December 31, 2018 3. Unexpected turnover during 2019 caused an estimate of the forfeiture of 5% of the stock options. Determine the adjusted compensation cost, and prepare the appropriate journal entryls) on December 31, 2019 and 2020. Complete this question by entering your answers in the tabs below Required 1 Required 2Required 3 millions (I.e., Determine the total compensation cost pertaining to the options on January 1, 2018. (Enter your answer in 10,000,000 should be entered as 10).) million on cost Record compensation expense on December 31, 2018 Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2018 Record entry Clear entry View general journal View transaction list Journal entry worksheet 2 Record the compensation expense. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2019 Record entry Clear entry View general journal View transaction list Journal entry worksheet 2 Record the compensation expense Note: Enter debits before credits. Date General Journal Credit December 31, 2020 Record entry Clear entry View general journal

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