Answered: On July 1, 2019, Windsor Company…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter15: Shareholders’ Equity: Capital Contributions And Distributions

Section: Chapter Questions

Problem 29P

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Question

On July 1, 2019, Windsor Company adopted a stock-option plan that granted options to key executives to purchase 86,000 shares of the company’s $1 par value common stock. The options were granted on January 1, 2020, and were exercisable 3 years after the date of grant if the grantee was still an employee of the company. The options expired 4 years from date of grant. The option price was set at $63, and the fair value option-pricing model determines the total compensation expense to be $612,000.

All of the options were exercised February 1, 2023, when the market price was $75 a share.

Prepare journal entries relating to the stock option plan for the years 2019 through 2023. Assume that the employee performs services equally in 2020, 2021 and 2022. (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. Round intermediate calculations to 5 decimal places, e.g. 1.24687 and final answers to 0 decimal places, e.g. 5,125.)

Date

Account Titles and Explanation

Debit

Credit

choose a transaction date

enter an account title to record the transaction on July 1, 2019

enter a debit amount

enter a credit amount

enter an account title to record the transaction on July 1, 2019

enter a debit amount

enter a credit amount

choose a transaction date

enter an account title to record the transaction on January 1, 2020

enter a debit amount

enter a credit amount

enter an account title to record the transaction on January 1, 2020

enter a debit amount

enter a credit amount

choose a transaction date

enter an account title to record the transaction on December 31, 2020

enter a debit amount

enter a credit amount

enter an account title to record the transaction on December 31, 2020

enter a debit amount

enter a credit amount

choose a transaction date

enter an account title to record the transaction on December 31, 2021

enter a debit amount

enter a credit amount

enter an account title to record the transaction on December 31, 2021

enter a debit amount

enter a credit amount

choose a transaction date

enter an account title to record the transaction on December 31, 2022

enter a debit amount

enter a credit amount

enter an account title to record the transaction on December 31, 2022

enter a debit amount

enter a credit amount

choose a transaction date

enter an account title to record the transaction on February 1, 2023

enter a debit amount

enter a credit amount

enter an account title to record the transaction on February 1, 2023

enter a debit amount

enter a credit amount

enter an account title to record the transaction on February 1, 2023

enter a debit amount

enter a credit amount

enter an account title to record the transaction on February 1, 2023

enter a debit amount

enter a credit amount

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