2. Johnstown Company granted 10 officers rights to buy 10,000 shares each of common stock $2 par, at $11 per share on May 1, 2020 the grant date. The stock was selling for $8 per share at the time. The rights cannot be exercised until the beginning of 2021 and expire at the end of 2022. Compensation expense is $175,000, covering a period of 2021 and 2022. Record the following: Dr. Cr. May 1, 2020, the grant date, issue of the rights. Dec. 31, 2021, compensation expense Jul. 1, 2021, 90% of the rights were exercised, as the stock climbed to $13 per share. Dec. 31, 2022, compensation expense Dec. 31, 2022, 10% of the rights expired because one officer left the company.

2. Johnstown Company granted 10 officers rights to buy 10,000 shares each of common stock $2 par, at $11 per share on May 1, 2020 the grant date. The stock was selling for $8 per share at the time. The rights cannot be exercised until the beginning of 2021 and expire at the end of 2022. Compensation expense is $175,000, covering a period of 2021 and 2022. Record the following: Dr. Cr. May 1, 2020, the grant date, issue of the rights. Dec. 31, 2021, compensation expense Jul. 1, 2021, 90% of the rights were exercised, as the stock climbed to $13 per share. Dec. 31, 2022, compensation expense Dec. 31, 2022, 10% of the rights expired because one officer left the company.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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