Req 1 to 3 Req 4 The SARS are exercised on June 6, 2029, when the share price is $60, and executives choose to receive the market price appreciation in cash. Prepare the appropriate journal entry(s) on that date. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). View transaction list Journal entry worksheet 1 2 Record any necessary adjustment to compensation expense. Note: Enter debits before credits. Date June 06, 2029 General Journal Debit Credit Record entry Clear entry View general journal > Show less▲ Req 1 to 3 Req 4 Prepare the appropriate journal entries pertaining to the SARS on January 1, 2024 and December 31, 2024-December 31, 2027. The SARS remain unexercised on December 31, 2028, prepare the appropriate entry. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,550,000 should be entered as 5.50). Show less▲ View transaction list Journal entry worksheet 1 2 3 4 5 6 Record the award of 12 million SARS on January 1, 2024 when the market price of the stock is $48 per share and the fair value of the SARS is $2.50 per SAR. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry View general journal >
Req 1 to 3 Req 4 The SARS are exercised on June 6, 2029, when the share price is $60, and executives choose to receive the market price appreciation in cash. Prepare the appropriate journal entry(s) on that date. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). View transaction list Journal entry worksheet 1 2 Record any necessary adjustment to compensation expense. Note: Enter debits before credits. Date June 06, 2029 General Journal Debit Credit Record entry Clear entry View general journal > Show less▲ Req 1 to 3 Req 4 Prepare the appropriate journal entries pertaining to the SARS on January 1, 2024 and December 31, 2024-December 31, 2027. The SARS remain unexercised on December 31, 2028, prepare the appropriate entry. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,550,000 should be entered as 5.50). Show less▲ View transaction list Journal entry worksheet 1 2 3 4 5 6 Record the award of 12 million SARS on January 1, 2024 when the market price of the stock is $48 per share and the fair value of the SARS is $2.50 per SAR. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry View general journal >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
As part of its stock-based compensation package, International Electronics granted 12 million stock appreciation rights (SARs) to top officers on January 1, 2024.
- At exercise, holders of the SARs are entitled to receive cash or stock equal in value to the excess of the market price at exercise over the share price at the date of grant.
- The SARs cannot be exercised until the end of 2027 (vesting date) and expire at the end of 2029.
- The $1 par common shares have a market price of $48 per share on the grant date.
- The fair value of the SARs, estimated by an appropriate option pricing model, is $2.50 per SAR at January 1, 2024.
- The fair value re-estimated at December 31, 2024, 2025, 2026, 2027, and 2028, is $3.50, $2.50, $4, $2.50, and $4.00, respectively.
- All recipients are expected to remain employed through the vesting date.
Required:
1. to 3. Prepare the appropriate journal entries pertaining to the SARs on January 1, 2024 and December 31, 2024–December 31, 2027. The SARs remain unexercised on December 31, 2028, prepare the appropriate entry.
1. Record the award of 12 million SARs on January 1, 2024 when the market price of the stock is $48 per share and the fair value of the SARs is $2.50 per SAR.
2. Record any necessary
3. Record any necessary journal entry on December 31, 2025 when the fair value of the SARs is estimated at $2.50 per SAR.
4. Record any necessary journal entry on December 31, 2026 when the fair value of the SARs is estimated at $4.00 per SAR.
5. Record any necessary journal entry on December 31, 2027 when the fair value of the SARs is estimated at $2.50 per SAR.
6. Record any necessary journal entry on December 31, 2028 when the fair value of the SARs is estimated at $4.00 per SAR and the SARs remain unexercised.
4. The SARs are exercised on June 6, 2029, when the share price is $60, and executives choose to receive the market price appreciation in cash. Prepare the appropriate journal entry(s) on that date.
Transcribed Image Text:Req 1 to 3
Req 4
The SARS are exercised on June 6, 2029, when the share price is $60, and executives choose to receive the market price appreciation in
cash. Prepare the appropriate journal entry(s) on that date.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
View transaction list
Journal entry worksheet
1
2
Record any necessary adjustment to compensation expense.
Note: Enter debits before credits.
Date
June 06, 2029
General Journal
Debit
Credit
Record entry
Clear entry
View general journal
>
Show less▲
Transcribed Image Text:Req 1 to 3
Req 4
Prepare the appropriate journal entries pertaining to the SARS on January 1, 2024 and December 31, 2024-December 31, 2027. The
SARS remain unexercised on December 31, 2028, prepare the appropriate entry.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 5,550,000 should be entered as 5.50).
Show less▲
View transaction list
Journal entry worksheet
1
2
3 4 5 6
Record the award of 12 million SARS on January 1, 2024 when the market
price of the stock is $48 per share and the fair value of the SARS is $2.50 per
SAR.
Note: Enter debits before credits.
Date
January 01, 2024
General Journal
Debit
Credit
Record entry
Clear entry
View general journal
>
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