The journal entry on the date of grant. Given information: Number of shares as an option is 80,000 Par value of common stock is $1. Exercise price per share is $37. Vesting time period is 2 years. Estimated fair value at the grant date is $4,000,000 ( 80 , 000 shares × $ 50 per share ) . Initial vesting probability is 60%.

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Answer 1

Question

Chapter 19, Problem 19.3E

a.

To determine

The journal entry on the date of grant.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

b.

To determine

Prepare journal entry as there is no change in vesting probability.

c.

To determine

Journal entries for the year 2, assuming that vesting period probability increases to 80%.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

Vesting probability of year is 80%.

d.

To determine

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

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Answer 2

Question

Chapter 19, Problem 19.3E

a.

To determine

The journal entry on the date of grant.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

b.

To determine

Prepare journal entry as there is no change in vesting probability.

c.

To determine

Journal entries for the year 2, assuming that vesting period probability increases to 80%.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

Vesting probability of year is 80%.

d.

To determine

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

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Answer 3

Question

Chapter 19, Problem 19.3E

a.

To determine

The journal entry on the date of grant.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

b.

To determine

Prepare journal entry as there is no change in vesting probability.

c.

To determine

Journal entries for the year 2, assuming that vesting period probability increases to 80%.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

Vesting probability of year is 80%.

d.

To determine

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

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Answer 4

Question

Chapter 19, Problem 19.3E

a.

To determine

The journal entry on the date of grant.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

b.

To determine

Prepare journal entry as there is no change in vesting probability.

c.

To determine

Journal entries for the year 2, assuming that vesting period probability increases to 80%.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

Vesting probability of year is 80%.

d.

To determine

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

Expert Solution & Answer

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Answer 5

Chapter 19, Problem 19.3E

a.

To determine

The journal entry on the date of grant.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

b.

To determine

Prepare journal entry as there is no change in vesting probability.

c.

To determine

Journal entries for the year 2, assuming that vesting period probability increases to 80%.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

Vesting probability of year is 80%.

d.

To determine

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

Answer 6

Chapter 19, Problem 19.3E

a.

To determine

The journal entry on the date of grant.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

Answer 7

Chapter 19, Problem 19.3E

a.

To determine

The journal entry on the date of grant.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

Answer 8

b.

To determine

Prepare journal entry as there is no change in vesting probability.

Answer 9

b.

To determine

Prepare journal entry as there is no change in vesting probability.

Answer 10

c.

To determine

Journal entries for the year 2, assuming that vesting period probability increases to 80%.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

Vesting probability of year is 80%.

Answer 11

c.

To determine

Journal entries for the year 2, assuming that vesting period probability increases to 80%.

Given information:

Number of shares as an option is 80,000

Par value of common stock is $1.

Exercise price per share is $37.

Vesting time period is 2 years.

Estimated fair value at the grant date is $4,000,000 (80,000 shares×$50 per share) .

Initial vesting probability is 60%.

Vesting probability of year is 80%.

Answer 12

d.

To determine

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

Answer 13

d.

To determine

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

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

Prepare journal entry as there is no change in vesting probability.

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

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