Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Exercise 19-8 (Static) Stock options exercise; expirations [LO19-2] Martinez Audio Visual Incorporated offers an incentive stock option plan to its regional managers. On January 1,
Exercise 19-8 (Static) Stock options exercise; expirations [LO19-2] Martinez Audio Visual Incorporated offers an incentive stock option plan to its regional managers. On January 1, 2024, options were granted for 40 million $1 par common shares. - The exercise price is the market price on the grant date- $8 per share. - Options cannot be exercised prior to January 1, 2026, and expire December 31, 2030. - The fair value of the 40 million options, estimated by an appropriate option pricing model, is $1 per option. Required: 1. Determine the total compensation cost pertaining to the incentive stock option plan. 2. to 5. Prepare the appropriate journal entries to record compensation expense on December 31, 2024 and 2025 . Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12,2026 , when the market price is $9 per share and the entry on December 31,2030 , when the remaining options that have vested expire without being exercised
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started