On January 2, 2021, the Life Science Corporation granted 9,000 stock options allowing employees to purchase 9,000 shares of the company’s common stock at $50 per share. A third of the options vest at the end of each of the next three years (i.e., a third will vest at the end of 2021). The company treats each tranche as a separate award based on the vesting date. The fair values of the options that vest at the end of 2021-2023 are $5.00, $6.00, and $8.00, respectively. REQUIRED: 1. Calculate compensation expense for Life Science during 2021-2023. 2. Prepare the journal entries for 2021-2023.
On January 2, 2021, the Life Science Corporation granted 9,000 stock options allowing employees to purchase 9,000 shares of the company’s common stock at $50 per share. A third of the options vest at the end of each of the next three years (i.e., a third will vest at the end of 2021). The company treats each tranche as a separate award based on the vesting date. The fair values of the options that vest at the end of 2021-2023 are $5.00, $6.00, and $8.00, respectively. REQUIRED: 1. Calculate compensation expense for Life Science during 2021-2023. 2. Prepare the journal entries for 2021-2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 2, 2021, the Life Science Corporation granted 9,000 stock options allowing employees to purchase 9,000 shares of the company’s common stock at $50 per share. A third of the options vest at the end of each of the next three years (i.e., a third will vest at the end of 2021). The company treats each tranche as a separate award based on the vesting date. The fair values of the options that vest at the end of 2021-2023 are $5.00, $6.00, and $8.00, respectively.
REQUIRED:
1. Calculate compensation expense for Life Science during 2021-2023.
2. Prepare the
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