Prepare the necessary entries for the events

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Question: Option pricing model determines total compensation expense to be $825,000. On January 1, 2018, Norman Corporation granted compensatory stock options for 75,000 shares of its $20 par value common stock to certain of its key employees. The market price of the common stock on that date was $36 per share and the option price was $30. The Black-Scholes

The options are exercisable beginning January 1, 2020, provided those key employees are still in Norman's employ at the time the options are exercised. The options expire on June 30, 2020.

On January 4, 2020, when the market price of the stock was $45 per share, 70,000 options were exercised. The remaining options expired unexercised.

Prepare the necessary entries for these events using the fair value method

Reference no: EM132738295

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