Chapter 19, Problem 19.8E

(1)

Stock options: Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period.

To determine

The compensation cost of stock options

(2)

To determine

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

• Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
• Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The entry for compensation expense on December 31, 2018, in the books of Corporation WAV

(3)

To determine

To journalize: The entry for compensation expense on December 31, 2019, in the books of Corporation WAV

(4)

To determine

To journalize: The options exercised in the books of Corporation WAV

(5)

To determine

To journalize: The expired options before being exercised in the books of Corporation WAV