On January 1, 2026, Sheffield Inc. granted stock options to officers and key employees for the purchase of 21,000 shares of the company's $10 par common stock at $24 per share. The options were exercisable within a 5-year period beginning January 1, 2028, by grantees still in the employ of the company, and expiring December 31, 2032. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $361,400. On April 1, 2027, 2,100 options were terminated when the employees resigned from the company. The market price of the common stock was $35 per share on this date. On March 31, 2028, 12,600 options were exercised when the market price of the common stock was $41 per share. Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2026, 2027, and 2028. (List all debit entries before credit entries. 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 O for the amounts. Record entries in the order displayed in the problem statement.)
On January 1, 2026, Sheffield Inc. granted stock options to officers and key employees for the purchase of 21,000 shares of the company's $10 par common stock at $24 per share. The options were exercisable within a 5-year period beginning January 1, 2028, by grantees still in the employ of the company, and expiring December 31, 2032. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $361,400. On April 1, 2027, 2,100 options were terminated when the employees resigned from the company. The market price of the common stock was $35 per share on this date. On March 31, 2028, 12,600 options were exercised when the market price of the common stock was $41 per share. Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2026, 2027, and 2028. (List all debit entries before credit entries. 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 O for the amounts. Record entries in the order displayed in the problem statement.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 8RE: On January 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the...
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Transcribed Image Text:On January 1, 2026, Sheffield Inc. granted stock options to officers and key employees for the purchase of 21,000 shares of the
company's $10 par common stock at $24 per share. The options were exercisable within a 5-year period beginning January 1, 2028, by
grantees still in the employ of the company, and expiring December 31, 2032. The service period for this award is 2 years. Assume that
the fair value option-pricing model determines total compensation expense to be $361,400.
On April 1, 2027, 2,100 options were terminated when the employees resigned from the company. The market price of the common
stock was $35 per share on this date.
On March 31, 2028, 12,600 options were exercised when the market price of the common stock was $41 per share.
Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and
charges to compensation expense, for the years ended December 31, 2026, 2027, and 2028. (List all debit entries before credit entries.
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 O for the amounts. Record entries in the order displayed in the problem statement.)
Date
Account Titles and Explanation
Debit
I
Credit
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