Reference no: EM132804698

EastCo has the following common shares on its balance sheet at December 31, 2016, the company's year-end:

Common shares, no par, unlimited authorized, 186,000 issued and outstanding $4,365,000

• On January 1, 2017, EastCo granted 4,900 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, 2020, 4,900 common shares at a base option price of $80 per share. On the option grant date, an option-pricing model assigned a value to the options equal to $55,200. EastCo follows ASPE and has chosen to account for forfeitures as they occur.

• One individual who received the options exercised the options on December 31, 2020, when the share price was $120. The second individual did not exercise her options. The share price fell to $115 in 2021 and her options lapsed. The third individual left the company in 2019 and his options were forfeited.

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

Problem b) Record the first year compensation expense

Problem c) Record the exercising of the options.

Problem d) Record the forfeit of the options

Problem e) Record the lapsing of the options.