Record the journal entry for the granting of the options

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Reference no: EM132714900

Question - JenCo has the following common shares on its balance sheet at December 31, 2016, the company's year-end: Common shares, no par, unlimited authorized, 121,000 issued and outstanding $4,260,000.

On January 1, 2017, JenCo granted 3,900 non-transferable stock options to each of its 3 senior executives. The stock options provide that each individual will be eligible to purchase, no earlier than December 31, 2021, 3,900 common shares at a base option price of $75 per share. On the option grant date, an option-pricing model assigned a value to the options equal to $86,500. JenCo follows ASPE and has chosen to account for forfeitures as they occur.

One individual who received the options exercised the options on December 31, 2021, when the share price was $115. The second individual did not exercise her options. The share price fell to $105 in 2022 and her options lapsed. The third individual left the company in 2020 and his options were forfeited.

Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). Please make sure your final answer(s) are accurate to 2 decimal places.

With the exception of part (a), assume all transactions took place on December 31 prior to the adjusting entry for compensation expense. If no entry is required, leave it blank.

Required -

a) Record the journal entry for the granting of the options.

b) Record the first year compensation expense.

c) Record the exercising of the options.

d) Record the forfeit of the options.

e) Record the lapsing of the options.

Reference no: EM132714900

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