Schmidt Electronics offered an incentive stock plan to its employees. On January 1, Year 1, 100,000 options were granted for 100,000 $1 par common shares. The exercise price equals the $6 market price of the common stock on the grant date. The vesting period is 3 years. The options cannot be exercised before January 1, Year 4, and expire on December 31, Year 5. Each option has a value of $3 based upon an option pricing model. What is the entry to record the expiration of 15% of the options on December 31, Year 5? OA. APIC-Stock Options 45,000 Compensation Expense 45,000 OB. APIC- Stock Options 45,000 APIC-Expired Stock Options 45,000 OC. APIC-Stock Options 45,000 Retained Earnings 45,000 OD. Stock Options Receivable 75,000 Common Stock 25,000 APIC 50,000
Schmidt Electronics offered an incentive stock plan to its employees. On January 1, Year 1, 100,000 options were granted for 100,000 $1 par common shares. The exercise price equals the $6 market price of the common stock on the grant date. The vesting period is 3 years. The options cannot be exercised before January 1, Year 4, and expire on December 31, Year 5. Each option has a value of $3 based upon an option pricing model. What is the entry to record the expiration of 15% of the options on December 31, Year 5? OA. APIC-Stock Options 45,000 Compensation Expense 45,000 OB. APIC- Stock Options 45,000 APIC-Expired Stock Options 45,000 OC. APIC-Stock Options 45,000 Retained Earnings 45,000 OD. Stock Options Receivable 75,000 Common Stock 25,000 APIC 50,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Schmidt Electronics offered an incentive stock plan to its employees. On January 1, Year 1, 100,000 options were granted for 100,000 $1 par common shares. The exercise price equals the $6 market price of the
common stock on the grant date. The vesting period is 3 years. The options cannot be exercised before January 1, Year 4, and expire on December 31, Year 5. Each option has a value of $3 based upon an
option pricing model.
What is the entry to record the expiration of 15% of the options on December 31, Year 5?
OA. APIC-Stock Options
45,000
Compensation Expense
45,000
OB. APIC- Stock Options
45,000
APIC-Expired Stock Options
45,000
OC. APIC-Stock Options
45,000
Retained Earnings
45,000
OD. Stock Options Receivable
75,000
Common Stock
25,000
APIC
50,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87f377c8-556b-40c3-ad73-583aac17d9d0%2Fe2f5a0a4-e274-4e7d-97e3-ba42a1b4fe7d%2Fehfwaup_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Schmidt Electronics offered an incentive stock plan to its employees. On January 1, Year 1, 100,000 options were granted for 100,000 $1 par common shares. The exercise price equals the $6 market price of the
common stock on the grant date. The vesting period is 3 years. The options cannot be exercised before January 1, Year 4, and expire on December 31, Year 5. Each option has a value of $3 based upon an
option pricing model.
What is the entry to record the expiration of 15% of the options on December 31, Year 5?
OA. APIC-Stock Options
45,000
Compensation Expense
45,000
OB. APIC- Stock Options
45,000
APIC-Expired Stock Options
45,000
OC. APIC-Stock Options
45,000
Retained Earnings
45,000
OD. Stock Options Receivable
75,000
Common Stock
25,000
APIC
50,000
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