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Prepare all necessary journal entries for epistemology inc

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Reference no: EM132834294

On Jan 1, 2021, Epistemology Inc. granted 500,000 options to its executive team. Each option allows the executive to purchase one common share at $100. The options are exercisable for three years, starting on Jan 1, 2024, if the executive is still employed at Ontology Inc.

  1. At the time, the market price of each common share was $75. It was determined that the fair compensation value of the option is $1,700,000.
  2. On Jan 1, 2022, an executive with 50,000 options allocated to them leaves the company to become a teacher. At the time, the market value of a common share was $107.
  3. On Jun 12, 2025, an executive 50,000 options, leaves the company and request to have his stock options exercised.
  4. At the time, the market value of a common share was $125. There are no other options exercised.

Required -

Problem 1: Prepare all necessary journal entries.

Reference no: EM132834294

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