Exercise 138 Credit account titles are automatically indented when amount is ent

Question

Exercise 138 Credit account titles are automatically indented when amount is entered Do not n Prepare the necessary entries rom 1/1/14-2/1/16 for the following events using the fair value method no entry is required, select "No Entry" for the account titles and enter O for the amounts.) en e manual . 1. On 1/1/14, the stockholders adopted a stock option plan for top executives whereby each might receive rights to purchase up to 25,000 shares of common stock at $35 per share. The par value is $10 per share. 2. On 2/1/14, options were granted to each of five executives to purchase 25,000 shares. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on 2/1/16. It is assumed that the options were for services performed equally in 2014 and 2015. The Black-Scholes option pricing model determines total compensation expense to be $1,970,000. At 2/1/16, four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were forfeited. 3. Date Account Titles and Explanation Debit Credit 12/31/14 12/31/15

Explanation / Answer

143) a) Schedule of Compensation Expense 380000 SARs Date Market Price Set Price Value of SARs Percent Accrued Accured to date Expense 12/31/2013 20 15 1900000 25% 475000 475000 -285000 12/31/2014 16 15 380000 50% 190000 -285000 665000 12/31/2015 18 15 1140000 75% 855000 425000 12/31/2016 19 15 1280000 100% 1280000 425000 (320000*4) (c) Liability Under Stock Appreciation Plan ............ 285000                                         compensation expense ......................................... 285000 (c) Liability Under Stock Appreciation Plan ............ 1280000                                           Cash ......................................... 1280000

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.