Q e At December 31, 201 D Employee facing reg 511,622 546,600 e User Dashboard M
ID: 2508537 • Letter: Q
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Q e At December 31, 201 D Employee facing reg 511,622 546,600 e User Dashboard Mail-t barahona@ Bryte ave: Library CHIest bank or adva GA D | Question 4 2 pts On January 1, 2018, Ritter Company granted stock options to officers and key employees for the purchase of 15.000 shares of the company's $1 par common stock at $20 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a five-year period beginning January 1, 2020 by grantees still employed by Ritter. The option pricing model determines total compensation expense to be $135,000. The journal entry to record the compensation expense related to these options for 2018 would include a credit to the Paid-in Capital-Stock Options account for o $o. $27,000. $30,000 $45.000. D Question 5 2 pts On January 1. 2018, Gridley Corporation had 250,000 shares of its $2 par value common stock outstanding. OnExplanation / Answer
Compensation Expenses for 3 years = $135,000
Year 1 -- Compensation Expense = $135,000 / 3 = $45,000
The following journal entry is to be passed to record the compensation expense for 2018
Debit -- Stock Option Compensation Expense $45,000
Credit -- Additional Paid in Capital - Stock Options $45,000
Hence the correct option is $45,000
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