Question
On January 1, 20x4, a Big and Small Co. initiated a Share Appreciation Plan for its employees. The vesting period ended on December 31, 20x5.
On January 1, 20x4, a Big and Small Co. initiated a Share Appreciation Plan for its
employees. The vesting period ended on December 31, 20x5. A total of 16,000 SAR's
were issued. At December 31, 20x4, the company estimated that 12,000 SAR's would
vest. At December 31, 20x5, the actual number of SAR's that vested were 12,500. A total
4,000 SAR's were also exercised on December 31, 20x5. The cash payment was debited
to Administrative expenses. The SAR liability at December 31, 20x4 was properly
calculated and is included in Accounts payable and accrued liabilities. The fair value and
intrinsic value of the SAR's is as follows:
Date Fair Value Intrinsic Value
Dec 31, 20x4 $11 -
Dec 31, 20x5 14 $11.50
Required - Prepare the journal entry/entries to record compensation expense at December
31, 20x5.
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