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Etice Assignment Gradebook ORION Downloadable eTextbook ament CALCULATOR FULL SCREEN PRINTER VERSION <BACK NEXT Problem 16-03 Your answer is partially correct. Try again. Larkspur Company adopted a stock-aption plan on November 30, 2019, that provided that 72,500 shares of $5 par value stock be designated as available for the granting of options to officers of the corporation at a price of $8 a share. The market price was $13 a share on November 30, 2020. On January 2, 2020, options to purchase 28,800 shares were granted to president Tom Winter-15,400 for services to be rendered in 2020 and 13,400 for services to be rendered in 2021. Also on that date, options to purchase 14,300 shares were granted to vice president Michelle Bennett-7,150 for services to be rendered in 2020 and 7,150 for services to be rendered in 2021. The market price of the stock was $14 a share on January 2, 2020. The options were exercisable for a period of one year following the year in which the services were rendered. The fair value of the options on the grant date was $5 per option. In 2021, neither the president nor the vice president exercised their options because the market price of the stock was below the exercise price. The market price of the stock was 58 a share on December 31, 2021, when the options for 2020 services lapsed. On December 31, 2022, both president Winter and vice president Bennett exercised their options for 13,400 and 7,150 shares, respectively, when the market price was $17 a share. Prepare the necessary journal entries in 2019 when the stock-option plan was adopted, in 2020 when options were granted, in 2021 when options lapsed, and in 2022 when options were exercised. (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.) Date Account Titles and Explanation Debit Credit Nov. 30, 2019 | Jan. 2, 2020 nolie oboriluontoeliabte bocanadision of labs wow care se Norciona 101

Answer 1

Answer:  

Date	Account Titles and Explanation	Debit	Credit
30-Nov-19	No journal entry (Note1)
02-Jan-20	No journal entry
(To record options granted to president
31-Dec-20	Compensation Expense ($5.00 per share *(15400+7150)22550 shares)	112750
	Paid-in Capital—Stock Options		112750
(To record compensation expense atributable to 2020)
31-Dec-21	Compensation Expense ($5.00 per share *(13400+7150)20550 shares)	102750
	Paid-in Capital—Stock Options		102750
(To record compensation expense atributable to 2021)
31-Dec-21	Paid-in Capital—Stock Options	112750
	Paid-in Capital from Expired Stock Options		112750
(To record lapse of presidents and vice presidents options)
31-Dec-22	Cash ($8.00 * 20,550 shares)	164400
	Paid-in Capital—Stock Options ($5.00 * 20,550)	102750
	Common Stock ($5.00 par value * 20,550 shares)		102750
	Paid-in Capital in Excess of Par		164400
(To record issuance of shares)

Note 1 = No journal entry would be recorded at the time when the stock option plan is adopted. Though, a memorandum entry might be made on November 30, 2019, mentioning that a stock option plan has authorized the officers future granting of options to buy 72,500 shares of $5.00 par value.