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On January 1, 2018, AAA granted stock options for 60,000 shares of its $10 par...

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Accounting

On January 1, 2018, AAA granted stock options for 60,000 shares of its $10 par value common stock to its key employees. The market price of the common stock on that date was $23 per share and the option price was $20. The Black-Scholes option pricing model determines total compensation expense to be $630,000. The options are exercisable beginning January 1, 2021, provided those key employees are still in AAAs employ at the time the options are exercised. The options expire on January 1, 2022. Prepare adjusting journal entries, if any, to recognize stock options in 2020.

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