Recording Performance Based Stock Options Through a performance share option plan, Anderson Inc. granted executives and other key employees share option awards where vesting is contingent upon meeting company-wide performance goals, including decreasing time for a new product launch and specified sales targets. The options vest over a three-year period (considered the requisite service period) and expire in 6 years. The company granted 26,000 options on January 1 of Year 1, for the purchase of 26,000 shares at $30 per share. The company estimates the fair value of the options to be $3 per share based upon an option-pricing model. Management believes it is probable that the company will achieve the specified performance targets defined in the performance share option plan. Record compensation expense (if any) for Year 1. Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Name Dr. Cr. Dec. 31
Recording Performance Based Stock Options Through a performance share option plan, Anderson Inc. granted executives and other key employees share option awards where vesting is contingent upon meeting company-wide performance goals, including decreasing time for a new product launch and specified sales targets. The options vest over a three-year period (considered the requisite service period) and expire in 6 years. The company granted 26,000 options on January 1 of Year 1, for the purchase of 26,000 shares at $30 per share. The company estimates the fair value of the options to be $3 per share based upon an option-pricing model. Management believes it is probable that the company will achieve the specified performance targets defined in the performance share option plan. Record compensation expense (if any) for Year 1. Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Name Dr. Cr. Dec. 31
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 6P
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