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Category > Accounting Posted 09 May 2017 My Price 4.00

Indigo Corporation

On January 1, 2016, Indigo Corporation granted 9,300 options to key executives. Each option allows the executive to purchase one share of Indigo’s $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2018, if the grantee is still employed by the company at the time of the exercise. On the grant date, Indigo’s stock was trading at $26 per share, and a fair value option-pricing model determines total compensation to be $425,000.

 

On May 1, 2018, 7,440 options were exercised when the market price of Indigo’s stock was $30 per share. The remaining options lapsed in 2020 because executives decided not to exercise their options.

 

Prepare the necessary journal entries related to the stock option plan for the years 2016 through 2020

Answers

SuperTutor
(15)
Status NEW Posted 09 May 2017 03:05 AM My Price 4.00

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file 1494302072-Solutions file.docx preview (56 words )
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