The compensation cost of stock options

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Answer 1

Question

Chapter 19, Problem 19.9E

(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 S Cycles

(3)

To determine

To journalize: The options exercised in the books of S Cycles

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Answer 2

Question

Chapter 19, Problem 19.9E

(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 S Cycles

(3)

To determine

To journalize: The options exercised in the books of S Cycles

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Answer 3

Question

Chapter 19, Problem 19.9E

(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 S Cycles

(3)

To determine

To journalize: The options exercised in the books of S Cycles

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Answer 4

Question

Chapter 19, Problem 19.9E

(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 S Cycles

(3)

To determine

To journalize: The options exercised in the books of S Cycles

Expert Solution & Answer

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Answer 5

Chapter 19, Problem 19.9E

(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 S Cycles

(3)

To determine

To journalize: The options exercised in the books of S Cycles

Answer 6

Chapter 19, Problem 19.9E

(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

Answer 7

Chapter 19, Problem 19.9E

(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

Answer 8

(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 S Cycles

Answer 9

(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 S Cycles

Answer 10

(3)

To determine

To journalize: The options exercised in the books of S Cycles

Answer 11

(3)

To determine

To journalize: The options exercised in the books of S Cycles

Answer 12

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Answer 13

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Answer 14

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Answer 15

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The compensation cost of stock options

Solution Summary: The author explains that stock options are stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain period. Journal entries are recorded chronologically and systematically.

The compensation cost of stock options

To journalize: The options exercised in the books of S Cycles

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Chapter 19 Solutions