Aylmer Corp., a public company, adopted a stock option plan on November 30, Y4, designated 120,000 common shares as available for the granting of options to officers of the corporation at an exercise price of $9.50 a share. The market value was $12.25 a share on November 30, Y4. On January 2, Y5, options to purchase 45,000 shares were granted to President Riley. These were to be earned equally over the subsequent two years. The shares' market value was $14.00 a share on January 2, The options were exercisable for a period of one year following the years in which the services were rendered. On January 2, Y5, the value of the options was estimated at $590,000. On June 8, Y7, the president exercised 33,000 of the options. The shares' market value was $9.30 a share on December 31, Y7 when the rest of the options expired. REQUIRED: a. Prepare the necessary journal entry in Y4 when the stock options were granted b. Prepare the necessary journal entry in Y5 and Y6 when the stock options were earned c. Prepare the necessary journal entry in Y7 when the stock options were exercised d. Prepare the necessary journal entry in Y7 when the rest of the stock options expired

Aylmer Corp., a public company, adopted a stock option plan on November 30, Y4, designated 120,000 common shares as available for the granting of options to officers of the corporation at an exercise price of $9.50 a share. The market value was $12.25 a share on November 30, Y4. On January 2, Y5, options to purchase 45,000 shares were granted to President Riley. These were to be earned equally over the subsequent two years. The shares' market value was $14.00 a share on January 2, The options were exercisable for a period of one year following the years in which the services were rendered. On January 2, Y5, the value of the options was estimated at $590,000. On June 8, Y7, the president exercised 33,000 of the options. The shares' market value was $9.30 a share on December 31, Y7 when the rest of the options expired. REQUIRED: a. Prepare the necessary journal entry in Y4 when the stock options were granted b. Prepare the necessary journal entry in Y5 and Y6 when the stock options were earned c. Prepare the necessary journal entry in Y7 when the stock options were exercised d. Prepare the necessary journal entry in Y7 when the rest of the stock options expired

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 4PA: Wingra Corporation was organized in March. It is authorized to issue 500,000 shares of $100 par...

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Aylmer Corp., a public company, adopted a stock option plan on November 30, Y4, designated 120,000 common shares as available for the granting of options to officers of the corporation at an exercise price of $9.20 a share. The market value was $11.25 a share on November 30, Y4. On January 2, Y5, options to purchase 55,000 shares were granted to President Riley. These were to be earned equally over the subsequent two years. The shares' market value was $14.00 a share on January 2, Y5. The options were exercisable for a period of one year following the years in which the services were rendered. On January 2, Y5, the value of the options was estimated at $653,000. On June 8, Y7, the president exercised 42,000 of the options. The shares' market value was $9.60 a share on December 31, Y7 when the rest of the options expired. REQUIRED: a. Prepare the necessary journal entry in Y4 when the stock options…
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