On December 31, 2015, in order to retain certain key executives, Entebbe Corporation granted them stock options.25,000 options were granted at an option price of $40 per share.Market prices of the shares were as follows: The options were granted as compensation for services to be rendered over a two-year period beginning January 1, 2016.The Black-Scholes option pricing model determined total compensation expense to be $500,000.The amount of compensation expense Entebbe should have recorded for calendar 2017 is
A)$250,000.
B)$500,000.
C)$875,000.
D)$1,000,000.

Question

On December 31, 2015, in order to retain certain key executives, Entebbe Corporation granted them stock options.25,000 options were granted at an option price of $40 per share.Market prices of the shares were as follows:  The options were granted as compensation for services to be rendered over a two-year period beginning January 1, 2016.The Black-Scholes option pricing model determined total compensation expense to be $500,000.The amount of compensation expense Entebbe should have recorded for calendar 2017 is
A)$250,000. 
B)$500,000. 
C)$875,000. 
D)$1,000,000.

Quizplus · Accepted Answer

The Answer of On December 31, 2015, in order to retain certain key executives, Entebbe Corporation granted them stock options.25,000 options were granted at an option price of $40 per share.Market prices of the shares were as follows:  The options were granted as compensation for services to be rendered over a two-year period beginning January 1, 2016.The Black-Scholes option pricing model determined total compensation expense to be $500,000.The amount of compensation expense Entebbe should have recorded for calendar 2017 is
A)$250,000. 
B)$500,000. 
C)$875,000. 
D)$1,000,000.

On December 31, 2015, in Order to Retain Certain Key