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Traditional Stock Option Plan Graded Vesting On January 2, 2023, the Life Science Corporation granted 9,000 stock options allowing employees to purchase 9,000 shares of

Traditional Stock Option Plan Graded Vesting

On January 2, 2023, the Life Science Corporation granted 9,000 stock options allowing employees to purchase 9,000 shares of the companys common stock at $50 per share. A third of the options vest at the end of each of the next three years (i.e., a third will vest at the end of 2023). The company treats each tranche as a separate award based on the vesting date. The fair values of the options that vest at the end of 2023-2025 are $5.00, $6.00, and $8.00, respectively.

1. Calculate compensation expense for Life Science during 2023-2025.

2. Prepare the journal entries for 2023-2025.

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