Make necessary journal entries related to stock option plan

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Question - On January 1, 2016, Sandhill Corporation granted 11,000 options to key executives. Each option allows the executive to purchase one share of Sandhill's $5 par value common stock at a price of $21 per share. The options were exercisable within a 2-year period beginning January 1, 2018, if the grantee is still employed by the company at the time of the exercise. On the grant date, Sandhill's stock was trading at $24 per share, and a fair value option-pricing model determines total compensation to be $422,000.

On May 1, 2018, 8,800 options were exercised when the market price of Sandhill's stock was $31 per share. The remaining options lapsed in 2020 because executives decided not to exercise their options.

Required - Make the necessary journal entries related to the stock option plan for the years 2016 through 2020?

Reference no: EM132614519

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