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On January 1, 2021, Wendy Day Co. granted stock options to key executives exercisable for 501,000 shares of the company's common stock at $19 per
On January 1, 2021, Wendy Day Co. granted stock options to key executives exercisable for 501,000 shares of the company's common stock at $19 per share. The stock options are intended as compensation for the next five years. The options are exercisable within a four- year period beginning January 1, 2025, by the executives still in the employ of the company. No options were terminated during 2021, but the company anticipates 6% forfeitures over the life of the stock options. The market price of the common stock was $19 per share at the date of the grant. Wendy Day estimated the fair value of the options at $5 each. 2% of the options are forfelted during 2022 due to executive turnover . What amount should Wendy Day record as compensation expense for the year ended December 31, 2022, assuming the company chooses to estimate forfeltures? Multiple Choice $501000 $495,990 $511,020 $470,940
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