Prepare journal entries to record issuance of the stock

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On January 1, 2010 Magilla Inc granted stock options to officers and employees for the purchase of 20,000 shares of the company's $10 par common stock at $25 per share. The options were exercisable within a 5-yr period beg. 1/1/2012 by grantees still in company expiring 12/31/2016. The service period for this award is 2 yrs. Assume the value of option-pricing model to determine total compensation of expense to be $400,000

On april 1, 2011 - 3000 options were terminated when the employees resiged from the company. The market value of the common stock was $35 per share on this date.

On March 31, 2012 -- 12,000 options were exerceised when the market value of the common stock was $40 per share.

Prepare journal entries to record issuance of the stock options, termination of stock options, exercise of the stock option and the charges compensation expense for year ending 12/31/2010, 12/31/2011, 12/31/2012

Reference no: EM13157432

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