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On 5/5/2018, a CEO exercised 100 options to buy a companys stock at the $50 exercise price. The market price of the companys stock is

On 5/5/2018, a CEO exercised 100 options to buy a companys stock at the $50 exercise price. The market price of the companys stock is $80 on that day. A company reissues treasury stock that originally cost $70 per share to provide the shares to the CEO.

What is the correct journal entry for the May 2018 exercise of the stock options?

Dr. Cash 5,000 Dr. Loss on sale 2,000 Cr. Treasury Stock 7,000

Dr. Cash 5,000 Dr. APIC 2,000 Cr. Treasury Stock 7,000

Dr. Cash 8,000 Cr. APIC 1,000 Cr. Treasury Stock 7,000

Dr. Cash 5,000 Dr. APIC 2,000 Cr. Common Stock 7,000

Dr. Cash 8,000 Cr. APIC 1,000 Cr. Common Stock 7,000

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