Breezy Lodge issued 25,000 at-the-money stock options to its management on January 1,2018.These options vest on January 1,2021.Breezy's share price was $18 on the grant date and $25 on the vesting date.Estimates of the fair value of the options showed that they were worth $4 on the grant date and $11 on the vesting date.On the vesting date,management exercised all 25,000 options.Breezy has a December 31 year-end.
Required:
Record all of the journal entries relating to the stock options.

Question

Quizplus · Accepted Answer

The Answer of Breezy Lodge issued 25,000 at-the-money stock options to its management on January 1,2018.These options vest on January 1,2021.Breezy's share price was $18 on the grant date and $25 on the vesting date.Estimates of the fair value of the options showed that they were worth $4 on the grant date and $11 on the vesting date.On the vesting date,management exercised all 25,000 options.Breezy has a December 31 year-end.
Required:
Record all of the journal entries relating to the stock options.

Breezy Lodge Issued 25,000 At-The-Money Stock Options to Its Management