Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2021, options were granted for 60,000 $1 par common shares. The exercise price equals the $5 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model. What is the correct entry to record the exercise of 90% the options on April 15, 2024, when the market price of the stock was $8?

Debit Cash for $270,000

Debit Paid-in capital-stock options for $54,000

Credit Common stock for $54,000

Credit Paid-in capital—excess of par for $270,000

Explanation:

Cash from he exercise of 90% = 60,000 * 90% * $5 = $270,000

Paid-in-capital for the stock options = $60,000 * 90% = $54,000

Common stock = 60,000 * 90% * $1 = $54,000

The the correct entry to record the exercise of 90% the options on April 15, 2024, when the market price of the stock was $8 will now be as follows:

Details                                                             Dr ($)             Cr ($)      

Cash                                                              270,000

Paid-in capital-stock options                        54,000

Common stock                                                                    54,000

Paid-in capital—excess of par                                          270,000

To record the exercise of 90% of the stock options.                    

drop shippers;

the answer is: guns or butter

hope i

-lavira : )