On January of Year Holiday Inc. offered a stock option incentive plan to a top executive. The plan
provided the executive stock options for Holiday Inc. $ par value, common stock at an option price
of $ per share through the expiration date of January of Year The fair value of the options based
upon an optionpricing model on January of Year is $ The market price at yearend of Holiday
Inc. stock is $ per share on January of Year and $ on December of Year The requisite service
period is years. The options were exercised on March of Year when the market price of the stock
was $ per share.
a Prepare the journal entry if any on January of Year
b Prepare the adjusting journal entry on December of Year the company's yearend.
c Prepare the journal entry on March of Year
Note: If a line in a journal entry isn't required for the transaction, select NAdebit and NAcredit as
the account names and leave the Dr and Cr answers blank zero
