May, 9, 2011
DR Bank 660,000
CR Common Stock 90,000
CR Retained earnings 570,000
June, 13, 2012
DR Bank 1,320,000
CR Common Stock 180,000
CR Retained Earnings 1,140,000
I'm a little confused with this exercise especially since it starts with an "termination" entry, could someone please help me out!
On oct 31, 2008 abc company adopted a stock option plan that granted options to executives allowing them to purchase 130,000 shares of the company's $3 par value common stock at $22. The options were granted on January 2, 2009. The compensation service period was 2 years commencing on the date of the grant. Using "acceptable option pricing model" the company established fair value of $690,000 as of january 2, 2009. The options were exercisable from january 1, 2011 through december 31, 2012
On dec 24, 2009 george thomas, who had been granted 13,000 options was terminated for incompetence, resulting in the revocation of his options.
On may 9, 2011; 30,000 options were exercised
On june 13, 2012; 60,000 options were exercised
The remaining options expired as the stock price plummeted on june 14, 2012.
Prepare entries for the 200 through 2012
Thanks in advance.
