On July 1, 2024, Cheyenne Financial Corporation granted 53,000 options to key executives. Each option allows the executive to purchase one share of Cheyenne's $1 par value common stock at a price of $58 per share. The options were exercisable within a 2-year period beginning July 1, 2026, if the grantee is still employed by the company at the time of the exercise. On the grant date, Cheyenne's stock was trading at $52 per share, and a fair value option-pricing model determines total compensation to be $325,000. On July 1, 2026, 37,100 options were exercised when the market price of Cheyenne's stock was $64 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. (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 0 for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)
On July 1, 2024, Cheyenne Financial Corporation granted 53,000 options to key executives. Each option allows the executive to purchase one share of Cheyenne's $1 par value common stock at a price of $58 per share. The options were exercisable within a 2-year period beginning July 1, 2026, if the grantee is still employed by the company at the time of the exercise. On the grant date, Cheyenne's stock was trading at $52 per share, and a fair value option-pricing model determines total compensation to be $325,000. On July 1, 2026, 37,100 options were exercised when the market price of Cheyenne's stock was $64 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. (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 0 for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On July 1, 2024, Cheyenne Financial Corporation granted 53,000 options to key executives. Each option allows the executive to
purchase one share of Cheyenne's $1 par value common stock at a price of $58 per share. The options were exercisable within a 2-year
period beginning July 1, 2026, if the grantee is still employed by the company at the time of the exercise. On the grant date, Cheyenne's
stock was trading at $52 per share, and a fair value option-pricing model determines total compensation to be $325,000.
On July 1, 2026, 37,100 options were exercised when the market price of Cheyenne's stock was $64 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. (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 0 for the amounts, List all debit entries before credit entries. Record journal entries in the order
presented in the problem.)
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