Stock Options Prepare the Necessary Entries from January 1, 2020 to February

question 85

Essay

Stock options
Prepare the necessary entries from January 1, 2020 to February 1, 2022 for the following events. If no entry is needed, write "No entry necessary."
1. On January 1, 2020, the shareholders of Musetta Inc. adopted a stock option plan for its top executives, where each could receive rights to purchase up to 3,000 common shares at $ 40 per share. At this date, the shares were trading for $ 32 per share.
2. On February 1, 2020, options were granted to five executives to purchase 3,000 shares each. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on February 1, 2022. It is assumed that the options were for services performed equally in 2020 and 2021. The Black-Scholes option pricing model determined total compensation expense to be $ 390,000.
3. On February 1, 2022, four executives exercised their options. The fifth executive chose not to exercise her options, which therefore were forfeited.

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Definitions:

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Polymerase Chain Reaction, a laboratory technique used to amplify segments of DNA for analysis.

DNA Cloning

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