The exercise price is the market price of the shares on the date of grant,...
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Accounting
The exercise price is the market price of the shares on the date of grant, currently $ per share.
The fair value of the options, estimated by an appropriate option pricing model, is $ per option.
Managements policy is to estimate forfeitures.
No forfeitures are anticipated.
Ignore taxes.
Required:
Determine the total compensation cost pertaining to the options on January
Prepare the appropriate journal entry to record compensation expense on December
Unexpected turnover during caused an estimate of the forfeiture of of the stock options. Prepare the appropriate journal entrys on December and in response to the new estimate.
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