On 5/5/2018, a CEO exercised 100 options to buy a company's stock at the $50 exercise price. The market price of the company's stock is $80 on that day. A company reissues treasury stock that originally cost $70 per share to provide the shares to the CEO. What is the correct journal entry for the May 2018 exercise of the stock options? Dr. Cash 5,000 Dr. Loss on sale 2,000 Cr. Treasury Stock 7,000 Dr. Cash 8,000 Cr. APIC 1,000 Cr. Common Stock 7,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Cr. Common Stock
7,000
Dr. Cash
5,000
Dr. APIC
2,000
Cr. Common Stock
7,000
Dr. Cash
5,000
Dr. APIC
2,000
Cr. Treasury Stock
7,000
Dr. Cash
8,000
Cr. APIC
1,000
Cr. Treasury Stock
7,000
Adjust
Draw
Transcribed Image Text:Cr. Common Stock 7,000 Dr. Cash 5,000 Dr. APIC 2,000 Cr. Common Stock 7,000 Dr. Cash 5,000 Dr. APIC 2,000 Cr. Treasury Stock 7,000 Dr. Cash 8,000 Cr. APIC 1,000 Cr. Treasury Stock 7,000 Adjust Draw
On 5/5/2018, a CEO exercised 100 options to
buy a company's stock at the $50 exercise
price. The market price of the company's
stock is $80 on that day. A company reissues
treasury stock that originally cost $70 per
share to provide the shares to the CEO.
What is the correct journal entry for the May
2018 exercise of the stock options?
Dr. Cash
5,000
Dr. Loss on sale
2,000
Cr. Treasury Stock
7,000
Dr. Cash
8,000
Cr. APIC
1,000
Cr. Common Stock
7,000
Adjust
Draw
Transcribed Image Text:On 5/5/2018, a CEO exercised 100 options to buy a company's stock at the $50 exercise price. The market price of the company's stock is $80 on that day. A company reissues treasury stock that originally cost $70 per share to provide the shares to the CEO. What is the correct journal entry for the May 2018 exercise of the stock options? Dr. Cash 5,000 Dr. Loss on sale 2,000 Cr. Treasury Stock 7,000 Dr. Cash 8,000 Cr. APIC 1,000 Cr. Common Stock 7,000 Adjust Draw
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