Stacy Corporation offered a stock option incentive plan to six of its top executives. During the second year from the date of the grant, but prior to the permissible exercise date, one of the six executives resigned and accepted employment with a competitor. In accordance with the provisions of the incentive plan, the stock option award for the resigned executive lapsed. At the date of lapse, the relevant account balance for all six executives combined was Paid-in Capital—Stock Options, $810,000 (adjusted carrying amount). The requisite service period extends for three more years. The company's policy is to record forfeitures as incurred.
Stacy Corporation offered a stock option incentive plan to six of its top executives. During the second year from the date of the grant, but prior to the permissible exercise date, one of the six executives resigned and accepted employment with a competitor. In accordance with the provisions of the incentive plan, the stock option award for the resigned executive lapsed. At the date of lapse, the relevant account balance for all six executives combined was Paid-in Capital—Stock Options, $810,000 (adjusted carrying amount). The requisite service period extends for three more years. The company's policy is to record forfeitures as incurred.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Recording Stock Options: Issuance and Forfeiture
Stacy Corporation offered a stock option incentive plan to six of its top executives. During the second year from the date of the grant, but prior to the permissible exercise date, one of the six executives resigned and accepted employment with a competitor. In accordance with the provisions of the incentive plan, the stock option award for the resigned executive lapsed. At the date of lapse, the relevant account balance for all six executives combined was Paid-in Capital—Stock Options, $810,000 (adjusted carrying amount). The requisite service period extends for three more years. The company's policy is to record forfeitures as incurred.
Transcribed Image Text:Recording Stock Options: Issuance and Forfeiture
Stacy Corporation offered a stock option incentive plan to six of its top executives. During the second
year from the date of the grant, but prior to the permissible exercise date, one of the six executives
resigned and accepted employment with a competitor. In accordance with the provisions of the
incentive plan, the stock option award for the resigned executive lapsed. At the date of lapse, the
relevant account balance for all six executives combined was Paid-in Capital-Stock Options, $810,000
(adjusted carrying amount). The requisite service period extends for three more years. The company's
policy is to record forfeitures as incurred.
Required
Provide the journal entry directly related to the forfeited options.
Account Name
Dr.
Cr.
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