On January 2, 2019, ABC Corporation granted 150 share options to each of its 250 employees. The option plan allows the employees to purchase a share of the entities P100 par value ordinary shares at P110. On January 2, 2019, the fair value of each option was P25 and market value of each share is P110. The option plan requires the employees receiving the options to be in the employ of the company at least until December 31, 2021. Options are exercisable in 2022. Actual and revised estimates of employees leaving the company during 2019, 2020 and 2021 are as follows:

2019 15 employees left, 20 more employees are expected to leave before December 31, 2021.

2020 10 employees left, 15 more employees are expected to leave before December 31, 2021.

2021 5 employees left

75% of the options were exercised in 2022 and the remaining options expired by the end of 2022.

1) How much is the compensation expense for the year ended December 31, 2020?

2) How much is the balance of Paid-in capital from unexercised options on December 31, 2022?

3) How much is to be credited to Ordinary Share Capital upon exercise of the options?

PROBLEM 2 On January 1,2019, the shareholders of ABC Corporation approved a plan that grants the company's eight executives to purchase 2,000 shares each of the company's P120 par value ordinary shares. The options are granted on January 2, 2019 and may be exercised from January to December 31, 2021. Based on an option pricing model used by the enterprise, the fair value of the option on January 2,2019 is P50. The option price per share is P100 and the fair value of the ordinary shares on January 2,2019 is P150 per share. At the end of 2019, it was expected that all five executives would stay until the end of 2020. However, 2 of 8 executives resigned on May 31,2020. Another 1 of the remaining 6 resigned on June 30,2021. All of the remaining executives exercised the options on December 31, 2021.

1) How much is to be debited to Share Premium- Share options upon exercise of the option?

2) How much is the compensation expense for the year ended December 31, 2020?

3) How much is to be credited to Ordinary Share Capital upon exercise of the options?