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On November 1, 2025, Windsor Company adopted a stock-option plan that granted options to key executives to purchase 38,100 shares of the company's $10 par value common stock. The options were granted on January 2, 2026, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $571,500. All of the options were exercised during the year 2028: 25,400 on January 3 when the market price was $67, and 12,700 on May 1 when the market price was $76 a share. Prepare journal entries relating to the stock option plan for the years 2026, 2027, and 2028. Assume that the employee performs services equally in 2026 and 2027. (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. Do not round intermediate calculations. Round answers to O decimal places, e.g. 5,125. Record entries in the order displayed in the problem statement.)

On November 1, 2025, Windsor Company adopted a stock-option plan that granted options to key executives to purchase 38,100 shares of the company's $10 par value common stock. The options were granted on January 2, 2026, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $571,500. All of the options were exercised during the year 2028: 25,400 on January 3 when the market price was $67, and 12,700 on May 1 when the market price was $76 a share. Prepare journal entries relating to the stock option plan for the years 2026, 2027, and 2028. Assume that the employee performs services equally in 2026 and 2027. (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. Do not round intermediate calculations. Round answers to O decimal places, e.g. 5,125. Record entries in the order displayed in the problem statement.)

FINANCIAL ACCOUNTING
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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Date ,2026 31, 2026 21 2027 V Account Titles and Explanation No Entry No Entry Compensation Expense Paid-in Capital-Stock Options Compensation Expense Debit 0 243000 285750 Credit OOOD 243000
Transcribed Image Text:Date ,2026 31, 2026 21 2027 V Account Titles and Explanation No Entry No Entry Compensation Expense Paid-in Capital-Stock Options Compensation Expense Debit 0 243000 285750 Credit OOOD 243000
On November 1, 2025, Windsor Company adopted a stock-option plan that granted options to key executives to purchase 38,100 shares of the company's $10 par value common stock. The options were granted on January 2, 2026, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $571,500. All of the options were exercised during the year 2028: 25,400 on January 3 when the market price was $67, and 12,700 on May 1 when the market price was $76 a share. Prepare journal entries relating to the stock option plan for the years 2026, 2027, and 2028. Assume that the employee performs services equally in 2026 and 2027. (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. Do not round intermediate calculations. Round answers to O decimal places, e.g. 5,125. Record entries in the order displayed in the problem statement.)
Transcribed Image Text:On November 1, 2025, Windsor Company adopted a stock-option plan that granted options to key executives to purchase 38,100 shares of the company's $10 par value common stock. The options were granted on January 2, 2026, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $571,500. All of the options were exercised during the year 2028: 25,400 on January 3 when the market price was $67, and 12,700 on May 1 when the market price was $76 a share. Prepare journal entries relating to the stock option plan for the years 2026, 2027, and 2028. Assume that the employee performs services equally in 2026 and 2027. (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. Do not round intermediate calculations. Round answers to O decimal places, e.g. 5,125. Record entries in the order displayed in the problem statement.)
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