On January 1, Year 1, Axis Corporation granted employees 83,000 stock options for 83,000 shares of $3 par value common stock. The exercise price on the date of issue was equal to the market price of $23. There is a two year vesting period and the options expire in four years. Employees have the right to sell back the shares to the corporation within six months of exercise. At the time of issue, the fair value of the options is estimated to be $37 per option. Two years later, the options are exercised. What is the appropriate journal entry? A. Cash Liability for Stock-based Compensation 249,000 3,071,000 Common Stock APIC in Excess of Par Common 249,000 3,071,000 OB. Cash 1,909,000 Common Stock APIC in Excess of Par Common 249,000 1,660,000 OC. Cash 1,535,500 Common Stock APIC in Excess of Par - Common 249,000 1,286,500 OD. Cash Liability for Stock-based Compensation Common Stock APIC in Excess of Par - Common 1,909,000 3,071,000 249,000 4,731,000

On January 1, Year 1, Axis Corporation granted employees 83,000 stock options for 83,000 shares of $3 par value common stock. The exercise price on the date of issue was equal to the market price of $23. There is a two year vesting period and the options expire in four years. Employees have the right to sell back the shares to the corporation within six months of exercise. At the time of issue, the fair value of the options is estimated to be $37 per option. Two years later, the options are exercised. What is the appropriate journal entry? A. Cash Liability for Stock-based Compensation 249,000 3,071,000 Common Stock APIC in Excess of Par Common 249,000 3,071,000 OB. Cash 1,909,000 Common Stock APIC in Excess of Par Common 249,000 1,660,000 OC. Cash 1,535,500 Common Stock APIC in Excess of Par - Common 249,000 1,286,500 OD. Cash Liability for Stock-based Compensation Common Stock APIC in Excess of Par - Common 1,909,000 3,071,000 249,000 4,731,000

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

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 17E

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