Concept explainers
a.
To calculate: The compensation expense for year 2.
Given Information:
Number of shares granted is 150,000.
Exercise price of the shares is $20.
Fair value at the grant date is $66.
Vesting period is 3 years.
Vesting probability is 100% in each year.
b.
The compensation expense for year 3 and journal entry of it.
Given Information:
Number of shares granted is 150,000.
Fair value at the grant date is $66.
Exercise price of the shares is $20.
Vesting period is 3 years.
Vesting probability is 100% in year 1 and 2.
Vesting probability is 75% in year 3
c.
The journal entry at the time of expiration of remaining stock.
Given Information:
Number of shares granted is 150,000.
Fair value at the grant date is $66.
Exercise price of the shares is $20.
Vesting period is 3 years.
Vesting probability is 100% in year 1 and 2.
Vesting probability is 75% in year 3
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Intermediate Accounting (2nd Edition)
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