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Under its executive stock option plan, Grey Corporation granted options on January 1, 2016, that permit executives to purchase 40,000 of the company's $1 par
Under its executive stock option plan, Grey Corporation granted options on January 1, 2016, that permit executives to purchase 40,000 of the company's $1 par common shares within the next six years, but not before December 31, 2018 (the vesting date). The exercise price is the market price of the shares on the date of grant, $6 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. No forfeitures are anticipated 2. Prepare the appropriate journal entry to record the exercise of 60% of the options on March 12, 2019, when the market price is $10 per share. b. Prepare the appropriate journal entry on December 31, 2022, when the remaining options that have vested expire without being exercised. Label your journal entries a) March 12, 2019 and b) December 31, 2022
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