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E16-12 (Issuance, Exercise, and Termination of Sto...




E16-12 (Issuance, Exercise, and Termination of Stock Options) On January 1, 2009, Scooby Corpora- tion granted 10,000 options to key executives. Each option allows the executive to purchase one share of Scooby?s $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2011, if the grantee is still employed by the company at the time of the exercise. On the grant date, Scooby?s stock was trading at $25 per share, and a fair value option- pricing model determines total compensation to be $450,000. On May 1, 2011, 9,000 options were exercised when the market price of Scooby?s stock was $30 per share. The remaining options lapsed in 2013 because executives decided not to exercise their options. Instructions Prepare the necessary journal entries related to the stock-option plan for the years 2009 through 2013.


Paper#4428 | Written in 18-Jul-2015

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