E16.12 (LO 3) (Issuance, Exercise, and Forfeiture of Share Options) On January 1, 2022, Magilla SA granted share options to officers and key employees for the purchase of 20,000 of the company's C10 par ordinary shares at €25 per share. The options were exercisable by grantees still in the employ of the company within a 5-year period, beginning January 1, 2024, and ending December 31, 2028. The service period for this award is 2 years. Assume that the fair value option- pricing model determines total compensation expense to be €400,000.
E16.12 (LO 3) (Issuance, Exercise, and Forfeiture of Share Options) On January 1, 2022, Magilla SA granted share options to officers and key employees for the purchase of 20,000 of the company's C10 par ordinary shares at €25 per share. The options were exercisable by grantees still in the employ of the company within a 5-year period, beginning January 1, 2024, and ending December 31, 2028. The service period for this award is 2 years. Assume that the fair value option- pricing model determines total compensation expense to be €400,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 3
E16.12 (LO 3) (Issuance, Exercise, and Forfeiture of Share Options) On January 1, 2022,
Magilla SA granted share options to officers and key employees for the purchase of 20,000 of the
company's C10 par ordinary shares at €25 per share. The options were exercisable by grantees still
in the employ of the company within a 5-year period, beginning January 1, 2024, and ending
December 31, 2028. The service period for this award is 2 years. Assume that the fair value option-
pricing model determines total compensation expense to be €400,00o.
On April 1, 2023, 3,000 options were forfeited when the employees resigned from the company.
The market price of the ordinary shares was C35 per share on this date.
On March 31, 2024, 12,000 options were exercised when the market price of the ordinary shares
was C40 per share.
Instructions
Prenare iournal entries ton record issuance of the share options, forfeiture of the share options,
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