Exercise 16-10 On November 1, 2014, Olympic Company adopted a stock-option plan

Question

Exercise 16-10 On November 1, 2014, Olympic Company adopted a stock-option plan that granted options to key executives to purchase 62,000 shares of the company's $13 par value common stock. The options were granted on January 2, 2015, 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 $50, and the fair value option-pricing model determines the total compensation expense to be $750,000 All of the options were exercised during the year 2017: 46,500 on January 3 when the market price was $68, and 15,500 on May 1 when the market price was $79 a share Prepare journal entries relating to the stock-option plan for the years 2015, 2016, and 2017. Assume that the employee performs services equally in 2015 and 2016. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Ily If no entry is re

Explanation / Answer

DATE ACCOUNT TITLE DEBIT CREDIT

1/2/15 No entry (only just plan adopted) 0.000 0.00

12/31/15 No entry (only options were grannted and excercise done) 0.00 0.00

12/31/16    No entry (only options were grannted and excercise done)0.00 0.00

1/3/17 Bank a/c 31,62,000.00

TO

Shares issued 31,62,000.00

(shares issued to employees 46500 at 68/share)

5/1/17 Bank a/c 12,24,500.00

To

Shares issued 12,24,500.00

shares issued to employees 15,500 at 79/share)

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