Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Textbook Question
Chapter 19, Problem 19.7BE
Employee Stock Options, Liability-Classified Awards, Journal Entries after Grant Date. The Goldwick Company awarded 1 000 options to acquire 1 000 shares of its common stock, which can be sold back to the company. The options vest over 3 years. The market price and the exercise price were both equal to $12 per share on the date of the grant. At the grant date the options have a fair value of $15 each. Prepare the
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Accounting for Stock Options
On April 1 of Year 1, Badger Corp. announced a stock option incentive plan for its top executives. The plan provides certain executives stock options for the company's common stock.
Each option allows for the purchase of one share of common stock, par $1, at a standard option price of $25 per share. The rights are nontransferable and are exercisable three years
after the grant date and prior to five years from the grant date. Continuing employment is required through the exercise date, and the requisite service period ends on the first possible
exercise date.
On April 1 of Year 1, 4,000 options were granted to employees when the market price was $30 per share. Using an option-pricing model, the fair value of the options granted was
$36,000. Employees exercised 2,400 options on June 30 of Year 4, when the market price of the stock was $45 per share.
.
a. Compute the total amount of compensation cost for the grant made on April 1 of Year 1.
$ 36,000 ✔
b.…
On January 1, 2025, Splish Corporation granted 1,800 shares of restricted-stock units. The par value of the stock is $5 per share.
The market price (fair value) of the stock is $64 per share on the date of grant. The period of benefit is 2 years.
Prepare Splish's journal entries for December 31, 2025 and 2026. (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 journal entries in the order presented in the problem.)
Date
12/31/25
12/31/26
2/31/26
Account Titles and Explanation
Unearned Compensation
Paid-in Capital in Excess of Par-Common Stock
Compensation Expense
Unearned Compensation
(To record compensation expense)
Compensation Expense
Debit
0000
Credit
On January 1, 2025, Splish Corporation granted 1,800 shares of restricted-stock units. The par value of the stock is $5 per share.
The market price (fair value) of the stock is $64 per share on the date of grant. The period of benefit is 2 years.
Prepare Splish's journal entries for December 31, 2025 and 2026. (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 journal entries in the order presented in the problem.)
Date
12/31/25
12/31/26
12/31/26
12/31/25
12/31/26
12/31/26
Account Titles and Explanation
Unearned Compensation
Paid-in Capital in Excess of Par - Common Stock
Compensation Expense
Unearned Compensation
(To record compensation expense)
Compensation Expense
Unearned Compensation
Paid-in Capital in Excess of Par - Common Stock
Compensation Expense
Unearned Compensation
(To record…
Chapter 19 Solutions
Intermediate Accounting
Ch. 19 - What is the allocation period used to expense...Ch. 19 - How do companies account for stock-based...Ch. 19 - Do companies with equity-based compensation plans...Ch. 19 - When accounting for employee stock options, will a...Ch. 19 - Prob. 19.5QCh. 19 - Prob. 19.6QCh. 19 - Prob. 19.7QCh. 19 - Prob. 19.8QCh. 19 - Prob. 19.9QCh. 19 - Prob. 19.10Q
Ch. 19 - Prob. 19.1MCCh. 19 - Prob. 19.2MCCh. 19 - Prob. 19.3MCCh. 19 - Prob. 19.4MCCh. 19 - Prob. 19.5MCCh. 19 - Prob. 19.6MCCh. 19 - Prob. 19.7MCCh. 19 - Prob. 19.8MCCh. 19 - Prob. 19.1BECh. 19 - Prob. 19.2BECh. 19 - Prob. 19.3BECh. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Employee Stock Options, Liability-Classified...Ch. 19 - Prob. 19.8BECh. 19 - Prob. 19.9BECh. 19 - Prob. 19.10BECh. 19 - Prob. 19.11BECh. 19 - Prob. 19.12BECh. 19 - Prob. 19.13BECh. 19 - Prob. 19.14BECh. 19 - Prob. 19.15BECh. 19 - Prob. 19.16BECh. 19 - Prob. 19.17BECh. 19 - Prob. 19.18BECh. 19 - Prob. 19.19BECh. 19 - Prob. 19.20BECh. 19 - Prob. 19.21BECh. 19 - Prob. 19.22BECh. 19 - Prob. 19.23BECh. 19 - Prob. 19.24BECh. 19 - Prob. 19.25BECh. 19 - Prob. 19.26BECh. 19 - Prob. 19.27BECh. 19 - Prob. 19.28BECh. 19 - Prob. 19.1ECh. 19 - Prob. 19.2ECh. 19 - Employee Stock Options. Equity-Classified Awards....Ch. 19 - Prob. 19.4ECh. 19 - Prob. 19.5ECh. 19 - Prob. 19.6ECh. 19 - Prob. 19.7ECh. 19 - Prob. 19.8ECh. 19 - Prob. 19.9ECh. 19 - Prob. 19.10ECh. 19 - Prob. 19.11ECh. 19 - Prob. 19.12ECh. 19 - Prob. 19.13ECh. 19 - Prob. 19.14ECh. 19 - Prob. 19.15ECh. 19 - Prob. 19.16ECh. 19 - Prob. 19.1PCh. 19 - Prob. 19.2PCh. 19 - Prob. 19.3PCh. 19 - Prob. 19.4PCh. 19 - Prob. 19.5PCh. 19 - Prob. 19.6PCh. 19 - Prob. 19.7PCh. 19 - Prob. 19.8PCh. 19 - Prob. 19.9PCh. 19 - Prob. 19.10PCh. 19 - Prob. 19.11PCh. 19 - Prob. 19.12PCh. 19 - Prob. 1JCCh. 19 - Prob. 2FSCCh. 19 - Prob. 1SSCCh. 19 - Prob. 2SSCCh. 19 - Basis for Conclusions Case 1: Are Employee Stock...Ch. 19 - Prob. 2BCC
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