Question

Modules Grades --/1 Wiley Accounting Weekly Updates Question 5 View Policies Current Attempt in Progress Student Practice and Solutions Manual Wiley CPAexcel Con- tinued Access On January 1, 2021, Novak Inc.granted stock options to officers and key employees for the purchase of 18,000 shares of the company's $10 par common stock at $26 per share. The options were exercisable within a 5-year period beginning January 1, 2023, by grantees still in the employ of the company, and expiring December 31, 2027. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $327,000. Discussions Conferences On April 1, 2022, 1,800 options were terminated when the employees resigned from the company. The market price of the common stock was $36 per share on this date. Collaborations On March 31, 2023, 10,800 options were exercised when the market price of the common stock was $42 per share. WileyPLUS Support Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2021, 2022, and 2023. (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

Answer 1

Answer Page No @ Lowinal entries On Jan 1, 2001, No journal entry is vrecorded. Because it is the date of grant on dec 31, 2011, Compensation expense = $ 327000 X le = $ 163500 On april 1, 2012, . Paid To Capétal - stock ophons = 163500 x 14.00 = $16350 On dec 31, 2012, . Compensation expense = 327000 x D x 18000 = $147150 (18000 -1800) On Mar 31, 2023) cash 10800 x $26 por share - $280800 Paid in capital - estoch options = 327000 X 19000 = $196200 Common stock = 10800 x $10 = $108000 10800

Paid in capital excess of par = 280800 +196200 - 108000 lageino e = $ 369000 I Date | Particular Debit Credit Jan 1, 2021 NO entry is recorded dec 31, compensation expense $ 163500 2021 Paid in capital - stock ophions $163500 Aprili, Paid in capital - stock options $16350 2022 Compensation expense $16350 dec 31, compensation expense Paid in capital - stock options $147150 May 31, casch $ 280800 2023 Paid in Capital - stock options ? $196200 Commonsloch $108000 Paid in capital excess of poor $369000 Note : There are 5400 options unezercised as of Mar 31, 2022 (18000 -1800 – 10800 = 5400) 2022