Under its executive stock option plan, National Corporation granted 17 million options on January 1, 2021, that permit executives to purchase 17 million of the company's $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $21 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. Suppose that the options are exercised on April 3, 2024, when the market price is $28 per share. Ignoring taxes, what journal entry will National record? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet Record entry for options exercised on April 3, 2024, when the market price is $28 per share. Note: Enter debits before credits. Date General Journal Debit Credit April 03, 2024 On January 1, 2021, Farmer Fabrication issued stock options for 320,000 shares to a division manager. The options have an estimated fair value of $8 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 4% in five years. Suppose that after one year, Farmer estimates that it is not probable that divisional revenue will increase by 4% in five years. Required: 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2022? 3. What journal entry will be needed to account for the options in 2022? Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 What is the revised estimate of the total compensation and what action will be taken to account for the options in 2022? 1. Estimated total compensation 2. What journal entry will be needed to account for the options in 2022? Farmer will reverse the 2021 recorded compensation. Req 1 and 2 Req3 > On January 1, 2021, Farmer Fabrication issued stock options for 320,000 shares to a division manager. The options have an estimated fair value of $8 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 4% in five years. Suppose that after one year, Farmer estimates that it is not probable that divisional revenue will increase by 4% in five years. Required: 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2022? 3. What journal entry will be needed to account for the options in 2022? Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 What journal entry will be needed to account for the options in 2022? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet Record compensation expense
