Question
On January 1, 2018, Sunland Company granted Sam Wine, an employee, an option to buy 1,000 shares of Sunland Co. stock for $30 per share,
On January 1, 2018, Sunland Company granted Sam Wine, an employee, an option to buy 1,000 shares of Sunland Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $6360. Wine exercised his option on October 1, 2018 and sold his 1,000 shares on December 1, 2018. Quoted market prices of Sunland Co. stock in 2018 were:
July 1 | $28 per share |
October 1 | $34 per share |
December 1 | $38 per share |
The service period is for three years beginning January 1, 2018. As a result of the option granted to Wine, using the fair value method, Sunland should recognize compensation expense for 2018 on its books in the amount of
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