Prepare any necessary journal entries

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Prepare any necessary journal entries for Red Robin's stock-based compensation plan for 2022.
Red Robin granted 67,200 employee stock options on January 1, 2021. The options give the employees the right to
acquire 67,200 shares of Red Robin's common stock for an exercise price of $21.65 per share. The market price on
the date of grant was $21.65. The required vesting period is 2 years, so the options vest on December 31 of the
current year (2022). The options have a 7-year expiration period. Additional information is below:
Fair Value
Actual Forfeitures
Estimated Forfeiture Rate
12/31/2021
$5.65
Total compensation expense at fair value
Percentage of Options Expected to vest
Expected total compensation expense
Cumulative rate of amortization
Cumulative compensation expense
Expense recognized in prior years
Current year compensation expense
5%
12/31/2022
$6.25
850
4%
12/31/2021
389,760
95%
370,272
50%
185,136
185,136
12/31/2022
389,760
96%
374,170
100%
374,170
185,136
189,034
Transcribed Image Text:Prepare any necessary journal entries for Red Robin's stock-based compensation plan for 2022. Red Robin granted 67,200 employee stock options on January 1, 2021. The options give the employees the right to acquire 67,200 shares of Red Robin's common stock for an exercise price of $21.65 per share. The market price on the date of grant was $21.65. The required vesting period is 2 years, so the options vest on December 31 of the current year (2022). The options have a 7-year expiration period. Additional information is below: Fair Value Actual Forfeitures Estimated Forfeiture Rate 12/31/2021 $5.65 Total compensation expense at fair value Percentage of Options Expected to vest Expected total compensation expense Cumulative rate of amortization Cumulative compensation expense Expense recognized in prior years Current year compensation expense 5% 12/31/2022 $6.25 850 4% 12/31/2021 389,760 95% 370,272 50% 185,136 185,136 12/31/2022 389,760 96% 374,170 100% 374,170 185,136 189,034
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