On December 31, 2026, Brushy Mountain Co. grants its employees options to purchase 25,000 shares of $1 par common stock for $20 per share. The options vest on December 31, 2030 (after 4 years) and expire on December 31, 2031. On the date of grant, the shares are trading for $22 per share and the options have a fair value of $5 each. If all 25,000 options are exercised on January 1, 2031, the journal entry to record the exercise of the options will include a credit to Additional Paid-In Capital (APIC) - Common Stock equal to:
On December 31, 2026, Brushy Mountain Co. grants its employees options to purchase 25,000 shares of $1 par common stock for $20 per share. The options vest on December 31, 2030 (after 4 years) and expire on December 31, 2031. On the date of grant, the shares are trading for $22 per share and the options have a fair value of $5 each. If all 25,000 options are exercised on January 1, 2031, the journal entry to record the exercise of the options will include a credit to Additional Paid-In Capital (APIC) - Common Stock equal to:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2026, Brushy Mountain Co. grants its employees options to purchase 25,000 shares of $1 par common stock for $20 per share. The options vest on December 31, 2030 (after 4 years) and expire on December 31, 2031. On the date of grant, the shares are trading for $22 per share and the options have a fair value of $5 each. If all 25,000 options are exercised on January 1, 2031, the
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