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RecognitionStock Compensation Illustration: On November 1, 2016, the stockholders of Searle Company approve a plan that grants the company's five executives options to purchase 2,000
RecognitionStock Compensation Illustration: On November 1, 2016, the stockholders of Searle Company approve a plan that grants the company's five executives options to purchase 2,000 shares each of the company's $1 par value common stock. The company grants the options on January 1, 2017. The executives may exercise the options at any time within the next 10 years. The option price per share is $60, and the market price of the shares at the date of grant is $70 per share. Under the fair value method, the company computes total compensation expense by applying an acceptable fair value option-pricing model. The fair value option-pricing model determines Searle's total compensation expense to be $220,000. Record journal entry? Please explain it 1, Basic Entries. 2 Exercise. If Searle's executives exercise 2,000 of the 10,000 options (20 percent of the options) on June 1, 2020 (three years and five months after date of grant), the company records the following journal entry. 3. Expiration. If Searle's executives fail to exercise the remaining stock options before their expiration date, the company records the following at the date of expiration
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