On January 1, 2019, a company granted 10,000 options to key executives. Each option allows the executive to purchase one share of the company’s $5 par value common stock at a price of $20 per share. The options were exercisable within a 7-year period beginning January 1, 2022, if the grantee is still employed by the company at the time of the exercise. On the grant date, a fair value option-pricing model determines total compensation to be $792,000. How much compensation expense should be recorded on 12/31/2020? If no compensation expense should be recorded on 12/31/2020, please enter 0. Rounded to the nearest dollar, if necessary.
On January 1, 2019, a company granted 10,000 options to key executives. Each option allows the executive to purchase one share of the company’s $5 par value common stock at a price of $20 per share. The options were exercisable within a 7-year period beginning January 1, 2022, if the grantee is still employed by the company at the time of the exercise. On the grant date, a fair value option-pricing model determines total compensation to be $792,000. How much compensation expense should be recorded on 12/31/2020? If no compensation expense should be recorded on 12/31/2020, please enter 0. Rounded to the nearest dollar, if necessary.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2019, a company granted 10,000 options to key executives. Each option allows the executive to purchase one share of the company’s $5 par value common stock at a price of $20 per share. The options were exercisable within a 7-year period beginning January 1, 2022, if the grantee is still employed by the company at the time of the exercise. On the grant date, a fair value option-pricing model determines total compensation to be $792,000.
How much compensation expense should be recorded on 12/31/2020? If no compensation expense should be recorded on 12/31/2020, please enter 0. Rounded to the nearest dollar, if necessary.
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