M HW 7: Share based comp \\ C| ezto.mheducation.com/hm.tpx : Apps Syracuse Unive

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M HW 7: Share based comp C| ezto.mheducation.com/hm.tpx : Apps Syracuse University University of Michiga university of North C University ofTexas l Lockheed App M McGraw-Hill Connect My Binghamton 1 Handshake Indeed Brief Exercise 19-6 Stock options, expiration [LO19-2] Under its executive stock option plan, National Corporation granted options on January 1, 2016, that permit executives to purchase 12 million of the company's $1 par common shares wthin 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, $17 per share. The fair value of the options, estimated by an appropriate option pricing model is $5 per option. Suppose that the options expire without being exercised Ignoring taxes, what joumal entry wil 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 the options that expired without being exercised. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal ^4x 11/18/2017 3-28 PM

Explanation / Answer

National will record following journal entry:

Event General journal Debit Credit 1 Paid in capital-stock option(12,000,000×$5) $60,000,000 Paid in capital expiration $60,000,,0000

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