On January 1, 2020, Prospero Games Inc. granted stock options to managers and key employees under which the managers and employees could purchase shares of the company for $35. Prospero set aside 40,000 shares for this purpose. The options are exercisable within a four-year period beginning January 1, 2022 by employees still with the company, and the options expire on December 31, 2025. The estimated value of the options on January 1, 2020 is $4.50 per share. On January 10, 2022, 16,000 of the options were exercised when the stock price was $44. On December 17, 2022, an additional 10,000 of the options were exercised when the stock price was $48. No further stock options were exercised. Required: Prepare all the journal entries required between January 1, 2020 and December 31, 2025.
On January 1, 2020, Prospero Games Inc. granted stock options to managers and key employees under which the managers and employees could purchase shares of the company for $35. Prospero set aside 40,000 shares for this purpose. The options are exercisable within a four-year period beginning January 1, 2022 by employees still with the company, and the options expire on December 31, 2025. The estimated value of the options on January 1, 2020 is $4.50 per share.
On January 10, 2022, 16,000 of the options were exercised when the stock price was $44.
On December 17, 2022, an additional 10,000 of the options were exercised when the stock price was $48.
No further stock options were exercised.
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