Question
On January 1, 20x2, Orange Corp granted stock options to its top three executive employees allowing each employee to purchase 5,000 shares of its $5-par
On January 1, 20x2, Orange Corp granted stock options to its top three executive employees allowing each employee to purchase 5,000 shares of its $5-par common stock at $50 per share between January 1, 20x5, and December 31, 20x7. The option contract provide that these employees must perform at a high level for three years starting from the grant date in order to qualify for exercise of these options. The fair value of the options on January 1, 20x2, was $600,000. How much of compensation expense is to be recorded on January 1, 20x2? A $200,000 B $750,000 C $0 D $600,000
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