Calculated using options pricing model

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On January 1, 2017, Sandhill Corporation granted 4,300 options to executives. Each option entitles the holder to purchase one share of Sandhill’s common shares at $45 per share at any time after January 1, 2019. The shares’ market price is $55 per share on the date of grant, and the required service period is two years.

Prepare Sandhill’s journal entries for January 1, 2017 and December 31, 2017 and 2018. Assume that the options’ fair value as calculated using an options pricing model is $105,000. Ignore forfeitures for simplification purposes.

Reference no: EM131867849

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