Question
On January 1, Year 1, Tiffany granted employees 53,500 stock options for 53,500 shares of $3 par value common stock. The exercise price on the
On January 1, Year 1, Tiffany granted employees 53,500 stock options for 53,500 shares of $3 par value common stock. The exercise price on the date of issue was equal to the market price of $24. There is a two-year vesting period and the options expire in four years. Employees have the right to sell back the shares to the corporation within six months of exercise. The fair value of the options has been estimated to be $39 per option and the company does not expect any forfeitures of the options. What is the journal entry for compensation expense for Year 1?
A) Compensation Expense 1,043,250 Liability for Stock-based Compensation 1,043,250
B) Compensation Expense 1,284,000 Liability for Stock-based Compensation 1,284,000
C) Compensation Expense 1,043,250 Deferred Compensation 1,043,250
D) Compensation Expense 1,284,000 Deferred Compensation 1,284,000
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