I need help ASAP. Thank you in advance. Exercise 16-10 On November 1, 2017, Wind

Question

I need help ASAP. Thank you in advance.

Exercise 16-10 On November 1, 2017, Windsor Company adopted a stock-option plan that granted options to key executives to purchase 31,800 shares of the company's s9 par value common stock. The options were granted on January 2, 2018, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $477,000 All of the options were exercised during the year 2020: 21,200 on January 3 when the market price was $68, and 10,600 on May 1 when the market price was $78 a share. Prepare journal entries relating to the stock option plan for the years 2018, 2019, and 2020. Assume that the employee performs services equally in 2018 and 2019, (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round intermediate calculations to 5 decimal places, e.g. 1.24687 and final answers to o0 decimal places, e.g. 5,125 Date Account Titles and Explanation Debit Credit Jan. 3, 2020 May 1, 2020 Click if you would like to Show Work for this question: Open Show Work Question Attempts: 0 of 3 used SAVE FOR LATERSUBMIT ANSWER

Explanation / Answer

SOLUTION

Compensation Expense

Date Accounts title and Explanation Debit ($) Credit ($) 1/2/18 No Entry Required 12/31/18 Compensation Expense 238,500   Paid-in Capital -Stock Options 238,500 (To record compensation expense for 2018) ($477,000/2) 12/31/19 Compensation Expense 238,500 Paid-in Capital -Stock Options 238,500 (To record compensation expense for 2019) ($477,000/2) 1/3/20 Cash (21,200 * $40) 848,000 Paid-in Capital- Stock Options ($477,000* 21,200 / 31,800) 318,000 Common Stock (21,200 * $9) 190,800 Paid-in Capital in Excess of Par 975,200 (To record issuance of 21,200 shares of $9 par value stock upon exercise of options at option price of $40) 5/1/20 Cash (10,600 * $40) 424,000 Paid-in Capital - Stock Options ($477,000* 10,600 / 31,800) 159,000 Common stock (10,600 * $9) 95,400 Paid-in Capital in Excess of Par 487,600 (To record issuance of 10,600 shares of $9 par value stock upon exercise of options at option price of $40)

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

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