Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2018, options...
Wall Drugs offered an incentive stock option plan to its
employees. On January 1, 2018, options were granted for 60,000 $1
par common shares. The exercise price equals the $5 market price of
the common stock on the grant date. The options cannot be exercised
before January 1, 2021, and expire December 31, 2022. Each option
has a fair value of $1 based on an option pricing model.
Which is the correct entry to record compensation expense for the
year 2018?
Homework Answers
The entry would be
| Account | Debit | Credit |
| Compensation expenses | 20,000 | |
| Paid in capital - Stock options | 20,000 |
(60,000*1)/3
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