Prepare schedule that shows amount of compensation expense

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Reference no: EM131829415

Problem - On January 1, 2011, Happy Harpist Ltd. established a stock appreciation rights (SAR) plan for its executives. They could receive cash at any time during the next five years equal to the difference between the market price of the common shares and a pre-established price of $12 for 150,000 SARs. The market prices are

Dec 31, 2011-$18

Dec 31, 2012-$13

Dec 31, 2013-$15

Dec 31, 2014-$16

Dec 31, 2015---$20

On December 31, 2014, 60,000 SARs are exercised, and the remaining SARs are exercised on December 31, 2015.

Instructions -

1. Prepare a schedule that shows the amount of compensation expense for each of the four years, starting with 2011.

2. Prepare the journal entry at December 31, 2012 to record compensation expense.

3. Prepare the journal entry at December 31, 2015 to record the exercise of the remaining SARs.

Reference no: EM131829415

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