Question
Using the information from BE19-9, now assume that the stock appreciation rights are settled for stock. Prepare the journal entries to record the SAR plan.
Using the information from BE19-9, now assume that the stock appreciation rights are settled for stock. Prepare the journal entries to record the SAR plan. The par value of common stock is $1 per share. What journal entry will the company make on the date the employees purchase the shares?
BE19-9. Stock Appreciation Rights. [Learning Objective 4] Togo Incorporation started a share appreciation plan on January 1, 2022, when it granted 50,000 rights to its executives. The vesting period is 2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2024. The fair value of Togos SARs for the years ended December 31, 2022 and 2023, are as follows:
The table is as follow:
All rights are exercised on January 1, 2024, when their fair value is $7 and the market price of the stock is $35 per share. What is the compensation expense in 2022 and in 2023? Prepare the journal entries to record the SAR plan.
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