Question

Exercise 16-20 On January 1, 2020, Sunland Corp. granted stock options to its chief executive officer. This is the only stock option plan that Sunland offers and the details are as follows: Option to purchase: 2,700 common shares Option price per share: $37.00 Fair value per common share on date of grant: $28.80 Stock option expiration: The earlier of eight years after issuance or the employee’s cessation of employment with Sunland for any reason other than retirement Date when options are first exercisable: The earlier of four years after issuance or the date on which the employee reaches the retirement age of 65 Fair value of options on date of grant: $8.00 On January 1, 2025, 2,160 of the options were exercised when the fair value of the common shares was $40. The remaining stock options were allowed to expire. The CEO remained with the company throughout the period.

Assume that the entity follows ASPE and has decided not to include an estimate of forfeitures upon initial recognition of the compensation expense. Record the journal entry on January 1, 2020. (Credit account titles are automatically indented when the 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 January 1, 2020 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Assume that the entity follows ASPE and has decided not to include an estimate of forfeitures upon initial recognition of the compensation expense. Record the journal entry on December 31, 2020, the fiscal year end of Sunland Corp. (Credit account titles are automatically indented when the 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 December 31, 2020 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Assume that the entity follows ASPE and has decided not to include an estimate of forfeitures upon initial recognition of the compensation expense. Record the journal entry on January 1, 2025, the exercise date. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2025 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Assume that the entity follows ASPE and has decided not to include an estimate of forfeitures upon initial recognition of the compensation expense. Record the journal entry on December 31, 2027, the expiry date of the options. (Credit account titles are automatically indented when the 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 December 31, 2027 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Answer 1

Answer Page No 0 Jeannal entries o On Jan 1, DC ZO, No embly is recorded @ On dec 31,2000, the fiscal year end of Sunland forp's i Compensation expense = 2 400 shares <$ 8x = $ 5400 3 on Jan 1, 2025, the exercise date, cash = 2160 x $34 (: Ophion price per shoce = 837) = $ 79920 Contributed swiplus - stock options = 2400 x $8 x 2160 = $17080 2700 Common shares = 9920 + 14280 $97200 I on dec 31, 2007, the expiry date of the options 2400-2160 = 2400 R$ 8 xiert 2700 Contributed surplus - słock options : = $ 4320

Page No @ Particular Debit 1 Sol Date Credit Jant, @ 2020 $ 5400 2020 Noenby is recorded dec 31, compensation cupense $5400 Contributed surplus - stock options Jan 1, cash $799.00 Contributed surpluse - slock options to 17280 Common shares 1 dec31, contributed surplus -- shock options $ 4320 2027 Contributed surplus - expired Stock options 2025 $97200 9 $4320