what journal entry will National record?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Under its executive stock option plan, National Corporation granted 12 million options on January 1,
2018, that permit executives to purchase 12 million of the company's $1 par common shares within the
next six years, but not before December 31, 2020 (the vesting date). The exercise price is the market
price of the shares on the date of grant, $17 per share. The fair value of the options, estimated by an
appropriate option pricing model, is $5 per option. Suppose that the options are exercised on April 3,
2021, when the market price is $19 per share.
Ignoring taxes, what journal entry will National record? (If no entry is required for a transaction/event,
select "No journal entry required" in the first account field. Enter your answers in millions (i.e.,
10,000,000 should be entered as 10).)
View transaction list
Journal entry worksheet
1
Record entry for options exercised on April 3, 2021, when the market price is
$19 per share.
Note: Enter debits before credits.
Date
April 03, 2021
General Journal
Debit
Credit
Record entry
Clear entry
View general journal
Transcribed Image Text:Under its executive stock option plan, National Corporation granted 12 million options on January 1, 2018, that permit executives to purchase 12 million of the company's $1 par common shares within the next six years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, $17 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. Suppose that the options are exercised on April 3, 2021, when the market price is $19 per share. Ignoring taxes, what journal entry will National record? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet 1 Record entry for options exercised on April 3, 2021, when the market price is $19 per share. Note: Enter debits before credits. Date April 03, 2021 General Journal Debit Credit Record entry Clear entry View general journal
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Sales Tax, Restaurant Tax and Lodging Taxes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education