On 9/1/16, Armada Company adopted a stock option plan for Joe and Erica to purchase common...

3.9 Ratings (382 Votes)

Option Expense	=	(Expected Option to be Availed)Value of option Expired Period
		Vesting Period

Option Expense	=	(700 + 800) * (28 - 20) * 1
2017		1
	=	12000

Option Expense	=	(300 + 400) * (28 - 20) * 1
2017		1
	=	5600

Employee Stock Option	Debit	2400
General Reserve	Credit	2400

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

On 9/1/16, Armada Company adopted a stock option plan for
Joe and Erica to purchase common stock at $20 per share.
Joe was granted options to purchase 1,000
shares of stock: 700 shares for services performed in 2017
and 300 shares for services performed in 2018. Erica was
granted options to purchase 1,200 shares of stock: 800 shares
for services performed in 2017 and 400 shares for services
performed in 2018. These options can be exercised in 2019
and 2020. The fair value of the options on 9/1/16 (the grant
date) was $28 per option. The common stock is $1 par.
1) Record compensation expense for the stock option plan
for 2017 and 2018.
2) Assume in 2019, Joe exercises 800 of his options and
Erica exercises 1,100 of her options. The market price
of the common stock was $41 at the time of exercise.
Please record the exercise of the stock options.
3) Assume it is now 1/1/21, and no other options were
exercised. Record the expiration of the remaining options.
Date	DR	CR

Other questions asked by students