What amount should jim beam recognize as compensation

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Question

On January 1, 2017, Jim Beam Company granted 90,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2019, and expire on January 1, 2023.

Each option can be exercised to acquire one share of $1 par common stock for $12. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. No forfeitures were anticipated.

What amount should Jim Beam recognize as compensation expense for 2017?

If unexpected turnover in 2018 caused the company to estimate that 10% of the options would be forfeited, what amount should Jim Beam recognize as compensation expense for 2018?

Reference no: EM132318611

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