Question: on january 1 2018 ayayai inc granted stock options to...
On January 1, 2018, Ayayai Inc. granted stock options to
officers and key employees for the purchase of 21,000
shares of the company’s $ 10 par common stock at $24 per share. The
options were exercisable within a 5-year period beginning January
1, 2020, by grantees still in the employ of the company, and
expiring December 31, 2024. The service period for this award is 2
years. Assume that the fair value option-pricing model determines
total compensation expense to be $ 343,000.
On April 1, 2019, 2,100 options were terminated when the employees resigned from the company. The market price of the common stock was $ 36 per share on this date.
On March 31, 2020, 12,600 options were exercised when the market price of the common stock was $ 42 per share.
Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2018, 2019, and 2020.