IT Solutions Ltd. has a cash - settled SARS program for employees. These employees will receive a cashpayment after five years of service, calculated as the excess of share price over $8.75. In early 20X1,employees in total are granted 180,000 units in the program. The fair value of one SARS unit is estimated at$1 at the end of 20X1, $3 at the end of 20X2, and $2 at the end of 20X3. Estimated retention is 90% at theend of 20X1, 88% at the end of 20X2, and 75% at the end of 20X3. The payment is made at the end of 20X5. Required: Provide the journal entry to be recorded with respect to the SARS program at the end of 20X1, 20X2, and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in thefirst account field. Do not round intermediate calculations.)

The objective of the question is to determine the journal entries to be recorded for the Stock…

Answered: IT Solutions Ltd. has a cash - settled…

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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