AnnuG IncGranted 200,000 Stock Options to Its Employees

question 80

Essay

AnnuG Inc.granted 200,000 stock options to its employees.The options expire 45 years after the grant date of January 1,2011,when the share price was $23.Employees still employed by the company six years after the grant date may exercise the option to purchase shares at $45 each; that is,the options vest to the employees after five years.A consultant estimated the value of each option at the date of grant to be $2.50 each.
Requirement:
Record the journal entries relating to the issuance of stock options.

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Definitions:

Cervical Cells

Cells located in the cervix, the lower, narrow part of the uterus, which can be tested for abnormalities through a Pap smear.

Nesting

Behavior characterized by the urge to prepare one's home for a new arrival, commonly observed in the latter stages of pregnancy.

Labor

The process of childbirth from the start of uterine contractions to delivery.

Parturition

The act or process of giving birth; childbirth.