As part of its stockbased compensation package, International Electronics granted million stock appreciation rights SARs to top officers on January
At exercise, holders of the SARs are entitled to receive cash or stock equal in value to the excess of the market price at exercise over the share price at the date of grant.
The SARs cannot be exercised until the end of vesting date and expire at the end of
The $ par common shares have a market price of $ per share on the grant date.
The fair value of the SARs, estimated by an appropriate option pricing model, is $ per SAR at January
The fair value reestimated at December and is $$$$ and $ respectively.
All recipients are expected to remain employed through the vesting date.
Required:
to Prepare the appropriate journal entries pertaining to the SARs on January and December December The SARs remain unexercised on December prepare the appropriate entry.
The SARs are exercised on June when the share price is $ and executives choose to receive the market price appreciation in cash. Prepare the appropriate journal entrys on that date.
