Under its stock option plan, Ameri Corp. granted 3 million stock options to employees on January 1, 2021. The fair value of each option is $5 and no forfeitures are anticipated. Each option permits an employee to purchase one share of $1 par common stock within the next six years, but not before December 31, 2023 (the vesting date), at an exercise price of $12 per share (the market price of the shares on the grant date). On April 3, 2024, all options are exercised when the market price is $35 per share. The journal entry Ameri would record on April 3, 2024 would include: Multiple Choice a debit to Cash for $105,000,000. a debit to Paid-in capital-stock options for $5,000,000. a debit to Compensation Expense for $15,000,000. a credit to Paid-in capital-excess of par for $48,000,000.

Under its stock option plan, Ameri Corp. granted 3 million stock options to employees on January 1, 2021. The fair value of each option is $5 and no forfeitures are anticipated. Each option permits an employee to purchase one share of $1 par common stock within the next six years, but not before December 31, 2023 (the vesting date), at an exercise price of $12 per share (the market price of the shares on the grant date). On April 3, 2024, all options are exercised when the market price is $35 per share. The journal entry Ameri would record on April 3, 2024 would include: Multiple Choice a debit to Cash for $105,000,000. a debit to Paid-in capital-stock options for $5,000,000. a debit to Compensation Expense for $15,000,000. a credit to Paid-in capital-excess of par for $48,000,000.

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 18E

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