Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Please help Becker cpa question On January 1, Year 1, Kiwi Computers Corp granted options to its new CEO, Morgan Price, to purchase 50,000 shares

Please help Becker cpa question

On January 1, Year 1, Kiwi Computers Corp granted options to its new CEO, Morgan Price, to purchase 50,000 shares of $1.00 par value common stock for $30.00 per share. The options are exercisable after December 31, Year 3 and expire on March 31, Year 4. On the grant date, the market price of the stock was $25.00 per share. Using an acceptable valuation model, Kiwi determined that the options had a fair value of $150,000 on the grant date. The options serve as compensation for services rendered during the first three years. 1)Record the journal entry on the stock options grant date. Select the appropriate accounts from the drop-down menu in the Account column. Select "no entry" if no journal entry is required on this date. Enter the amounts in the Debit and Credit columns. 2Record the journal entries for all three years to record compensation expense. Select the appropriate accounts from the drop-down menu in the Account column. Select no entry if no journal entry is required on this date. Enter the amounts in the Debit and Credit columns.

December 31, Year 1:

December 31,Year 2:

December 31, Year 3:

Record the journal entry assuming one half of the options are exercised on January 1, Year 4. Select the appropriate accounts from the drop-down menu in the Account column. Select "no entry" if no journal entry is required on this date. Enter the amounts in the Debit and Credit columns.

Record the journal entry for the expiration of the options not exercised on January 1, Year 4. Select the appropriate accounts from the drop-down menu in the Account column. Select no entry if no journal entry is required on this date. Enter the amounts in the Debit and Credit columns.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions