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Grouper's HK$5 par beginning January 1, On the grant date, Gr compensation to be t On May 1, 2023, 8,37 options lapsed in 202

Grouper's HK$5 par beginning January 1, On the grant date, Gr compensation to be t On May 1, 2023, 8,37 options lapsed in 202

FINANCIAL ACCOUNTING
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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On January 1, 2021, Grouper Ltd. granted 9,300 options to key executives. Each option allows the executive to purchase one share of Grouper's HK$5 par value ordinary shares at a price of HK$20 per share. The options were exercisable within a 2-year period beginning January 1, 2023, if the grantee was still employed by the company at the time of the exercise (the service period is 2 years). On the grant date, Grouper's shares were trading at HK$26 per share, and a fair value option-pricing model determines total compensation to be HK$425,000. On May 1, 2023, 8,370 options were exercised when the market price of Grouper's shares were HK$30 per share. The remaining options lapsed in 2025 because executives decided not to exercise their options. Prepare the necessary journal entries related to the share-option plan for the years 2021 through 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the occount titles and enter O for the amounts. Round intermediate calculations to 5 decimal places, eg. 15.35486 and final answers to 0 decimal places, eg. 5.1253 Account Titles and Explanation Debit Credit Date
Transcribed Image Text:On January 1, 2021, Grouper Ltd. granted 9,300 options to key executives. Each option allows the executive to purchase one share of Grouper's HK$5 par value ordinary shares at a price of HK$20 per share. The options were exercisable within a 2-year period beginning January 1, 2023, if the grantee was still employed by the company at the time of the exercise (the service period is 2 years). On the grant date, Grouper's shares were trading at HK$26 per share, and a fair value option-pricing model determines total compensation to be HK$425,000. On May 1, 2023, 8,370 options were exercised when the market price of Grouper's shares were HK$30 per share. The remaining options lapsed in 2025 because executives decided not to exercise their options. Prepare the necessary journal entries related to the share-option plan for the years 2021 through 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the occount titles and enter O for the amounts. Round intermediate calculations to 5 decimal places, eg. 15.35486 and final answers to 0 decimal places, eg. 5.1253 Account Titles and Explanation Debit Credit Date
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