On January 1, 2016 Norman corporation granted compensatory stock options for 75,000 shares of its $20 par value common stock to certain of its key employees. The market price of the common stock on the date was $36 per share and the option of price were $30. The black scholes option pricing model determines the total compensation expenses to be $825,000.

The options are exercisable before January 1, 2018, provided those key employees are still in Normans employee at the time options are exercised. The options expire on June 30, 2018. On January 4, 2018 when the market price of the stock was $45 per share, 70,000 options for exercise. The remaining options expired unexcercied.

Prepare the necessary entries for these events using the fair value method.

3. On January 1, 2016, Norman Corporation granted compensatory stock options for 75,000 shares of its $20 par value common stock to certain of its key employees. The market price of the common stock on that date was $36 per share and the option price was $30. The Black-Scholes option pricing model determines total compensation expense to be $825,000 The options are exercisable beginning January 1, 2018, provided those key employees are still in Norman's employ at the time the options are exercised. The options expire on June 30, 2018. On January 4, 2018, when the market price of the stock was $45 per share, 70,000 options were exercised. The remaining options expired unexercised. Prepare the necessary entries for these events using the fair value method. (2 points) Date Account Titles Debit Credit