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INTERMEDIATE ACCOUNTING HANDOUT PROBLEM 4 Name Score Section Problem (10 points). Rome Company has the following information related to a stock option plan. ROME COMPANY INFORMATION RELATING TO COMPANY STOCK OPTION PLAN FOR YEARS 20X3 THROUGH 20x5 (1)On 1/1/20X3, the stockholders adopted a stock option plan for top excutives whereby each executive receives rights to purchase up to 10,000 shares of common stock at $40 per share The par value is $10 per share. (2)On 2/1/20x3, options were granted to each of five executives to purchase 10,000 shares. The options were nontransferable and the executive had to remain an employee of the company to exercise the option. The options expire on 2/1/20X5. It is assumed that the options were for services performed equally in 20X3 and 20X4. The Black-Scholes pricing model determines total compensation expense to be S option (3) At 2/1/20X5, four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were forfeited REQUIRED: Assuming the company uses the fair value method, prepareall general journal entries required, in proper form, for the period January 1, 20X3 through February 1, 20X5, to record the above information. Indicate the appropriate date for the entry. Omit

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