Question
Splish Company adopted a stock-option plan on November 30, 2016, that provided that70,600shares of $5par value stock be designated as available for the granting of
Splish Company adopted a stock-option plan on November 30, 2016, that provided that70,600shares of $5par value stock be designated as available for the granting of options to officers of the corporation at a price of $9a share. The market price was $11a share on November 30, 2017.
On January 2, 2017, options to purchase30,400shares were granted to president Tom Winter15,900for services to be rendered in 2017 and14,500for services to be rendered in 2018. Also on that date, options to purchase15,600shares were granted to vice president Michelle Bennett7,800for services to be rendered in 2017 and7,800for services to be rendered in 2018. The market price of the stock was $13a share on January 2, 2017. The options were exercisable for a period of one year following the year in which the services were rendered. The fair value of the options on the grant date was $4per option.
In 2018, neither the president nor the vice president exercised their options because the market price of the stock was below the exercise price. The market price of the stock was $8a share on December 31, 2018, when the options for 2017 services lapsed.
On December 31, 2019, both president Winter and vice president Bennett exercised their options for14,500and7,800shares, respectively, when the market price was $17a share.
Prepare the necessary journal entries in 2016 when the stock-option plan was adopted, in 2017 when options were granted, in 2018 when options lapsed, and in 2019 when options were exercised.
I have gotten the journal entries correct but not the actual numbers so I need help with that please.
Nov. 30, 2016: no entry
Jan. 2, 2017: no entry
Dec. 31, 2017
Compensation Expense
Paid in capital- stock options
Dec. 31, 2018
Compensation expense
Paid in capital- stock options
Dec. 31, 2019
Paid in capital-stock options
paid in capital-expired stock options
Dec. 31, 2019
Cash
Paid in capital - stock options
Common stock
Paid in capital - common stock
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started