Acc422 Intermediate Accounting: E16-10 On November 1, 2009, Olympic Company adopted a stock option

Acc422 Intermediate Accounting

E16-10 (Issuance and Exercise of Stock Options)
On November 1, 2009, Olympic Company adopted a stock option plan that granted options to key executives to purchase 40,000 shares of the company's $10 par value common stock. The options were granted on January 2, 2010, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant.The option price was set at $40,and the fair value option pricing model determines the total compensation expense to be $600,000. All of the options were exercised during the year 2012: 30,000 on January 3 when the market price was $67, and 10,000 on May 1 when the market price was $77 a share.

How much compensation expense is recognized on 1/2/10?
Prepare journal entries relating to the stock-option plan for the years 2010, 2011, and 2012. Assume that the employee performs services equally in 2010 and 2011. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
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