On January 1, 2020, XYZ Co. granted options to key executives to purchase 100,000 shares of the company's$10 par value Common Stock at an option price of $50 per share. The Black-Scholes option pricing modeldetermines total compensation expense to be $750,000. The options become exercisable after a 2 year serviceperiod from the date of grant.Assume all options were exercised in 2022 on the following dates:April 16, 2022– 70,000 options were exercised when the market value per share was $63September 4, 2022 – 30,000 options were exercised when the market value per share was $72Prepare a journal entry for:a) January 1, 2020b) December 31, 2020c) December 31, 2021d) April 16th, 2022e) September 4, 2022

Journal entry is a primary entry that records the financial transactions initially.

Answered: On January 1, 2020, XYZ Co. granted…

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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