Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pastore Inc. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise price is

Pastore Inc. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise price is $28 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $5.50 per option. If the options have a vesting period of five years, what would be part of the journal entry to record the compensation expense for the third year (after the grant date)?

A) a debit of $1.1 million.

B) a debit of $3.3 million.

C) a debit of $5.4 million.

D) a debit of $16.2 million.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of International Auditing And Assurance

Authors: Rick Hayes, Philip Wallage, Peter Eimers

4th Edition

9463720065, 978-9463720069

More Books

Students also viewed these Accounting questions

Question

How will these issues affect the grade levels you will teach?

Answered: 1 week ago