Question
On January 1, 2015, ABC Co. granted stock options to its five top executives. The stock options were to purchase five million of the companys
On January 1, 2015, ABC Co. granted stock options to its five top executives. The stock options were to purchase five million of the companys $5 par common shares (one million shares per executive) at $20 per share. The options vest after two years of service. The fair value of the options on the grant date was $12 million.
On January 1, 2016, the CFO of the company left the company to pursue an academic career in accounting.
On March 1, 2018, the CEO of the company exercised her option and purchased 800,000 shares when the prevailing market price of the stock was $30 per share.
No further options were exercised prior to the expiry of the options on Dec 31, 2018.
Provide journal entries on all relevant dates.
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