The journal entries recording of compensation expense over the vesting period. Given information: Number of shares as an option is 10,000. Par value of common stock is $2. Exercise price per share is $18. Vesting time period is 2 years. Estimated fair value at the grant date is $250,000 ( 10 , 000 shares × $ 2.5 per share ) Initial vesting probability is 100%.

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Answer 1

Question

Chapter 19, Problem 19.2E

a.

To determine

To prepare: The journal entries recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share)

Initial vesting probability is 100%.

b.

To determine

To prepare: The journal entries for recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

c.

To determine

The recording of expiration of all options and journal entries related to it.

Given information:

Number of shares as an option is 10,000

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

d.

To determine

The recording of compensation expense over the vesting period and journal entries.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 80%.

Vesting probability of year 2 is 80%.

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Answer 2

Question

Chapter 19, Problem 19.2E

a.

To determine

To prepare: The journal entries recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share)

Initial vesting probability is 100%.

b.

To determine

To prepare: The journal entries for recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

c.

To determine

The recording of expiration of all options and journal entries related to it.

Given information:

Number of shares as an option is 10,000

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

d.

To determine

The recording of compensation expense over the vesting period and journal entries.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 80%.

Vesting probability of year 2 is 80%.

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Answer 3

Question

Chapter 19, Problem 19.2E

a.

To determine

To prepare: The journal entries recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share)

Initial vesting probability is 100%.

b.

To determine

To prepare: The journal entries for recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

c.

To determine

The recording of expiration of all options and journal entries related to it.

Given information:

Number of shares as an option is 10,000

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

d.

To determine

The recording of compensation expense over the vesting period and journal entries.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 80%.

Vesting probability of year 2 is 80%.

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Answer 4

Question

Chapter 19, Problem 19.2E

a.

To determine

To prepare: The journal entries recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share)

Initial vesting probability is 100%.

b.

To determine

To prepare: The journal entries for recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

c.

To determine

The recording of expiration of all options and journal entries related to it.

Given information:

Number of shares as an option is 10,000

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

d.

To determine

The recording of compensation expense over the vesting period and journal entries.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 80%.

Vesting probability of year 2 is 80%.

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Answer 5

Chapter 19, Problem 19.2E

a.

To determine

To prepare: The journal entries recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share)

Initial vesting probability is 100%.

b.

To determine

To prepare: The journal entries for recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

c.

To determine

The recording of expiration of all options and journal entries related to it.

Given information:

Number of shares as an option is 10,000

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

d.

To determine

The recording of compensation expense over the vesting period and journal entries.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 80%.

Vesting probability of year 2 is 80%.

Answer 6

Chapter 19, Problem 19.2E

a.

To determine

To prepare: The journal entries recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share)

Initial vesting probability is 100%.

Answer 7

Chapter 19, Problem 19.2E

a.

To determine

To prepare: The journal entries recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share)

Initial vesting probability is 100%.

Answer 8

b.

To determine

To prepare: The journal entries for recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

Answer 9

b.

To determine

To prepare: The journal entries for recording of compensation expense over the vesting period.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

Answer 10

c.

To determine

The recording of expiration of all options and journal entries related to it.

Given information:

Number of shares as an option is 10,000

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

Answer 11

c.

To determine

The recording of expiration of all options and journal entries related to it.

Given information:

Number of shares as an option is 10,000

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 100%.

Vesting probability of year 2 is 60%.

Answer 12

d.

To determine

The recording of compensation expense over the vesting period and journal entries.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 80%.

Vesting probability of year 2 is 80%.

Answer 13

d.

To determine

The recording of compensation expense over the vesting period and journal entries.

Given information:

Number of shares as an option is 10,000.

Par value of common stock is $2.

Exercise price per share is $18.

Vesting time period is 2 years.

Estimated fair value at the grant date is $250,000 (10,000 shares×$2.5 per share) .

Initial vesting probability of year 1 is 80%.

Vesting probability of year 2 is 80%.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 19 - What is the allocation period used to expense...Ch. 19 - How do companies account for stock-based...Ch. 19 - Do companies with equity-based compensation plans...Ch. 19 - When accounting for employee stock options, will a...Ch. 19 - Prob. 19.5Q Ch. 19 - Prob. 19.6Q Ch. 19 - Prob. 19.7Q Ch. 19 - Prob. 19.8Q Ch. 19 - Prob. 19.9Q Ch. 19 - Prob. 19.10Q

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