SettingsOn May 1, 2021, Roger Rabbit Company adopted a stock-option plan that grantedoptions to key executives to purchase 8,000 shares of the company's $10 par valuecommon stock. The options were granted on January 1, 2022 and were exercisable 2years after the date of grant if the grantee was still an employee of the company. Theoptions expired 5 years from date of grant. The option price was set at $30, and thefair value option-pricing model determines the total compensation expense to be$189,000.All of the options were exercised during the year 2024: 3,400 on January 3 when themarket price was $38, and 4,600 on May 1 when the market price was $42 a share.Prepare journal entry relating to the stock option plan for the year 2023. Assumethat the employee performs services equally in 2022 and 2023.O Debit Compensation Expense $94,500; Credit Paid-in Capital-Stock Options $94,500O Debit Compensation Expense $189,000; Credit Paid-in Capital-Stock Options $189,000O Debit Credit Paid-in Capital-Stock Options $189,000; Credit Compensation Expense$189,500O Debit Credit Paid-in Capital-Stock Options $94,500; Credit Compensation Expense $94,500ASA

Journal entries refers to recording of the business transaction into the books or day book of the…

On May 1, 2021, Roger Rabbit Company adopted a stock-option plan that granted options to key executives to purchase 8,000 shares of the company's $10 par valu common stock. The options were granted on January 1, 2022 and were exercisable years after the date of grant if the grantee was still an employee of the company. T options expired 5 years from date of grant. The option price was set at $30, and th fair value option-pricing model determines the total compensation expense to be $189 000

On May 1, 2021, Roger Rabbit Company adopted a stock-option plan that granted options to key executives to purchase 8,000 shares of the company's $10 par valu common stock. The options were granted on January 1, 2022 and were exercisable years after the date of grant if the grantee was still an employee of the company. T options expired 5 years from date of grant. The option price was set at $30, and th fair value option-pricing model determines the total compensation expense to be $189 000

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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