On January 1, 2024, Swifty Corporation granted 9,100 options to key executives. Each option allows the executive to purchase one share of Swifty's $5 par value common stock at a price of $21 per share. The options were exercisable within a 2-year period beginning January 1, 2026, if the grantee is still employed by the company at the time of the exercise. On the grant date, Swifty's stock was trading at $26 per share, and a fair value option-pricing model determines total compensation to be $402,000. On May 1, 2026, 7,280 options were exercised when the market price of Swifty's stock was $30 per share. The remaining options lapsed in 2028 because executives decided not to exercise their options. Prepare the necessary journal entries related to the stock option plan for the years 2024 through 2028. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record entries in the order displayed in the problem statement.) Date ,2024 31, 2024 31, 2025 1,2026 2028 Account Titles and Explanation No Entry No Entry Compensation Expense Paid-in Capital-Stock Options Compensation Expense Paid-in Capital-Stock Options Cash Paid-in Capital-Stock Options Common Stock Paid-in Capital in Excess of Par - Common Stock Paid-in Capital-Stock Options Debit 0 201,000 Credit 0 201,000 DOOD 10000
On January 1, 2024, Swifty Corporation granted 9,100 options to key executives. Each option allows the executive to purchase one share of Swifty's $5 par value common stock at a price of $21 per share. The options were exercisable within a 2-year period beginning January 1, 2026, if the grantee is still employed by the company at the time of the exercise. On the grant date, Swifty's stock was trading at $26 per share, and a fair value option-pricing model determines total compensation to be $402,000. On May 1, 2026, 7,280 options were exercised when the market price of Swifty's stock was $30 per share. The remaining options lapsed in 2028 because executives decided not to exercise their options. Prepare the necessary journal entries related to the stock option plan for the years 2024 through 2028. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record entries in the order displayed in the problem statement.) Date ,2024 31, 2024 31, 2025 1,2026 2028 Account Titles and Explanation No Entry No Entry Compensation Expense Paid-in Capital-Stock Options Compensation Expense Paid-in Capital-Stock Options Cash Paid-in Capital-Stock Options Common Stock Paid-in Capital in Excess of Par - Common Stock Paid-in Capital-Stock Options Debit 0 201,000 Credit 0 201,000 DOOD 10000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2024, Swifty Corporation granted 9,100 options to key executives. Each option allows the executive to purchase one
share of Swifty's $5 par value common stock at a price of $21 per share. The options were exercisable within a 2-year period beginning
January 1, 2026, if the grantee is still employed by the company at the time of the exercise. On the grant date, Swifty's stock was
trading at $26 per share, and a fair value option-pricing model determines total compensation to be $402,000.
On May 1, 2026, 7,280 options were exercised when the market price of Swifty's stock was $30 per share. The remaining options
lapsed in 2028 because executives decided not to exercise their options.
Prepare the necessary journal entries related to the stock option plan for the years 2024 through 2028. (List all debit entries before
credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select
"No Entry" for the account titles and enter O for the amounts. Record entries in the order displayed in the problem statement.)
Date
,2024
31, 2024
31, 2025
1, 2026
,2028
Account Titles and Explanation
No Entry
No Entry
Compensation Expense
Paid-in Capital-Stock Options
Compensation Expense
Paid-in Capital-Stock Options
Cash
Paid-in Capital-Stock Options
Common Stock
Paid-in Capital in Excess of Par - Common Stock
Paid-in Capital-Stock Options
Debit
0
201,000
10000
Credit
0
201,000
OLILO
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