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On January 1, 2021, King's X Corp. granted stock options to officers and key employees for the purchase of 45,000 shares of the company's $10 par common stock at $27 per share. The options were exercisable within a 4-year period beginning January 1, 2026 by grantees still in the employ of the company, and had an expiration date of December 31, 2029. The vesting (service) period for this award was 5 years. Assume that a valid option pricing model determined the fair value of each option at the grant date to be $18. The fair market value of King's X stock on the grant date was $30 per share. On April 20, 2026, 32,000 options were exercised when the market price of the common stock was $42.50 per share. The remaining 13,000 options were never exercised. Required: Prepare any and all required journals entries related to the stock options for the following dates: January 1, 2021 December 31, 2021 December 31, 2022 April 20, 2026 ● December 31, 2029 ●

On January 1, 2021, King's X Corp. granted stock options to officers and key employees for the purchase of 45,000 shares of the company's $10 par common stock at $27 per share. The options were exercisable within a 4-year period beginning January 1, 2026 by grantees still in the employ of the company, and had an expiration date of December 31, 2029. The vesting (service) period for this award was 5 years. Assume that a valid option pricing model determined the fair value of each option at the grant date to be $18. The fair market value of King's X stock on the grant date was $30 per share. On April 20, 2026, 32,000 options were exercised when the market price of the common stock was $42.50 per share. The remaining 13,000 options were never exercised. Required: Prepare any and all required journals entries related to the stock options for the following dates: January 1, 2021 December 31, 2021 December 31, 2022 April 20, 2026 ● December 31, 2029 ●

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, King's X Corp. granted stock options to officers and key employees for the purchase of 45,000 shares of the company's $10 par common stock at $27 per share. The options were exercisable within a 4-year period beginning January 1, 2026 by grantees still in the employ of the company, and had an expiration date of December 31, 2029. The vesting (service) period for this award was 5 years. Assume that a valid option pricing model determined the fair value of each option at the grant date to be $18. The fair market value of King's X stock on the grant date was $30 per share. On April 20, 2026, 32,000 options were exercised when the market price of the common stock was $42.50 per share. The remaining 13,000 options were never exercised. Required: Prepare any and all required journals entries related to the stock options for the following dates: . January 1, 2021 . December 31, 2021 ● December 31, 2022 April 20, 2026 December 31, 2029 ●
Transcribed Image Text:On January 1, 2021, King's X Corp. granted stock options to officers and key employees for the purchase of 45,000 shares of the company's $10 par common stock at $27 per share. The options were exercisable within a 4-year period beginning January 1, 2026 by grantees still in the employ of the company, and had an expiration date of December 31, 2029. The vesting (service) period for this award was 5 years. Assume that a valid option pricing model determined the fair value of each option at the grant date to be $18. The fair market value of King's X stock on the grant date was $30 per share. On April 20, 2026, 32,000 options were exercised when the market price of the common stock was $42.50 per share. The remaining 13,000 options were never exercised. Required: Prepare any and all required journals entries related to the stock options for the following dates: . January 1, 2021 . December 31, 2021 ● December 31, 2022 April 20, 2026 December 31, 2029 ●
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