On January $1,2019,$ Rhine Company adopts a performance$-$based share option plan for its $80$ key executives. Each executive is granted a maximum of $70$ share options, but the number of options that vest depends on the percentage increase in Rhine$$s sales over a $3-$year service period. If by December $31,2021,$ sales have increased by at least $10\%,50$ options will vest for each executive; if sales have increased by at least $15\%,$ all $70$ options will vest. On the grant date, Rhine estimates that its sales will increase by $12\%$ over the service period, and that its employee turnover rate over the $3-$year service period will be $6\%.$ It also determines that the fair value of an option expected to vest is $$13\mathrm{.}40.$ At the end of $2021,$ actual sales had increased by $16\%$ for the service period, and the actual turnover was $6$ key executives for the service period.

Required:

$1.$ Prepare a schedule of Rhine$$s computations for its compensatory share option plan for $2019$ through $2021.$

$2.$ Prepare the compensation expense journal entry for $2019.$RHINE COMPANY

Score: $\frac{34}{45}$

Compensatory Share Plan Computations

$2019$ through $2021$