Question

On January 1, 2021, Blue Inc. granted stock options to officers and key employees for the purchase of 20,000 shares of the company’s $10 par common stock at $23 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 $378,200.

On April 1, 2022, 2,000 options were terminated when the employees resigned from the company. The market price of the common stock was $35 per share on this date.

On March 31, 2023, 12,000 options were exercised when the market price of the common stock was $39 per share.

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 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date Jan. 1, 2021Dec. 31, 2021April 1, 2022Dec. 31, 2022Mar. 31, 2023	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date Jan. 1, 2021Dec. 31, 2021April 1, 2022Dec. 31, 2022Mar. 31, 2023	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date Jan. 1, 2021Dec. 31, 2021April 1, 2022Dec. 31, 2022Mar. 31, 2023	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date Jan. 1, 2021Dec. 31, 2021April 1, 2022Dec. 31, 2022Mar. 31, 2023	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date Jan. 1, 2021Dec. 31, 2021April 1, 2022Dec. 31, 2022Mar. 31, 2023	enter an account title to record the transaction on May 31, 2020	enter a debit amount	enter a credit amount
	enter an account title to record the transaction on May 31, 2020	enter a debit amount	enter a credit amount
	enter an account title to record the transaction on May 31, 2020	enter a debit amount	enter a credit amount
	enter an account title to record the transaction on May 31, 2020	enter a debit amount	enter a credit amount

Answer 1

Page No Journal Entries Date Jant, 2001 Particular - No entry (this is the date of grants) 18910o 18910O Dec 31, 2011 Compensation Expenses Expense impensation Do. Ale To Paid in Capital - stock option (Being recording of compensation I expenses for 2021) [ $378200 x 121 18910 April 2022 Paid to Capital - Stock option-DS To lompensation expers $189100 x 2000 20000 [Being termination of stock option held by employees] Dec, 31 2022 Compensation expense br. To Paid in Capital -stuck options ( $ 378 2004.12)x(1800020000) c Being recording of compensation l expense for 2022 ] 170190 17olgo Dr. /276000 226920 March 31, Cash ($23 x 12000) 2023 Paid in Capital - Stock option ( $ 378200 X 12000 / 20000) To common stock To Paid in capital in exce J20000 382920