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Make all journal entries required for the stock option plan

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Reference no: EM133114882

Question - Stock Options - On January 1, 2021, Red Lake Corporation issued stock options for its common shares to executive officers. The options are exercisable beginning on January 1, 2023, provided the executive officers are still employed by Red Lake at the time the options are exercised. On June 15, 2025, 3 quarters of the stock options were exercised. The remainder of the options expired on December 31, 2026. Other information pertaining to the stock option plan follows:

Total compensation according to a fair value options pricing model $863,084

Total number of shares that could be purchased with the stock options 68,442

The option price per share is $24

The market price of Red Lake common shares on January 1, 2021 $24

The market price of Red Lake common shares on June 15, 2025 $34

Assume that Red Lake Corporation follows ASPE, and opts to account for employee stock option forfeitures as they occur.

Required -

1. What type of stock option plan has been granted? Explain your rationale.

2. Make all journal entries required for the stock option plan for the 2021 year to 2026 year. Assume that Red Lake Corporation has a December 31 year-end.

Reference no: EM133114882

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