Make entries to record transactions at the end of each year

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Parleon Enterprise issued share appreciation rights to its Chief executive Officer on January 1, 2018. The share appreciation rights may be exercised beginning January 1, 2021 provided that the officer is still in the employ of the company at the date of exercise. Each right provides for a cash payment equal to the amount the share price of Pau Company exceeds P50. The equivalent number of shares for share appreciation rights will be based on the level of sales of the company during the year 2020, as follows:

Level of Sales             Equivalent Shares Granted

P250 million -                 P400 million 10,000

Above P400 million -           P750 million 15,000

Above                               P750 million 20,000

  • The level of sales actually achieved by the enterprise and the share price at the end of each year are:

Year Level of Sales Share price, end of year

2018 P350 million P74

2019 P410 million P85

2020 P760 million P95

Required:

Question 1: Entries to record transactions at the end of each year (2018, 2019, 2020 and 2021).

Reference no: EM132505457

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