Question

On January 1, 2018, Oriole Company granted stock options to officers and key employees for the purchase of 19000 shares of the company's $1 par common stock at $22 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a five-year period beginning January 1, 2021 by grantees still employed by Oriole. The Black-Scholes option pricing model determines total compensation expense to be $187500. The market price of common stock was $28 per share at the date of grant. The journal entry to record the compensation expense related to these options for 2018 would include a credit to the Paid-in Capital—Stock Options account for

$0.

$37500.

$41800.

$62500.

Answer 1

Answer:- $62,500

Explanation:-

Compensation expenses related to these options for 2018 = $187,500/3 = $62,500