Prepare the necessary journal entries at the vesting date

Assignment Help Accounting Basics
Reference no: EM133110247

Question - On 1 January 2018, Entity A offered twenty directors an option scheme conditional on a three-year period of service.

The number of options granted to each director at the inception of the scheme was 2,000,000. The options are required to exercise at the end of the third year. Otherwise, they will be expired.

Upon exercise of the share options, those directors eligible would be required to pay $2.50 for each share.

The fair value of the options and the estimates of the number of options expected to vest at various points in time were as follows:

Year

Option Rights Expected to Vest

Fair Value of the Option

1 January 2018

16,000,000

$0.60

31 December 2018

14,000,000

$0.65

31 December 2019

18,000,000

$0.75

At the end of 2020, 20,000,000 option rights are actually vested and they are exercisable.

Required - Prepare the necessary journal entries at the vesting date for exercising the options when the fair value of a share was $4.00 and the fair value of a share was $2.00 respectively.

Reference no: EM133110247

Questions Cloud

What is international capital structure : Question: What is International Capital Structure?
Explain how blockchain and high frequency trading : Please explain how blockchain and high frequency trading can effect the financial markets. Do you believe that these two developments will continue in the futur
What is the company net change in cash as reported : A company reports a loss of $700,000 and depreciation of $180,000 for Year 2. What is the company's net change in cash as reported on its cash flow statement
Prepare a cash budget for the months of October : Prepare a cash budget for the months of October, November, and December, nothing any needed financing or excess cash available
Prepare the necessary journal entries at the vesting date : Prepare the necessary journal entries at the vesting date for exercising the options when the fair value of a share was $4.00
Find cost of replanting the harvested areas : Arrowsmith Lumber is considering purchasing the timber rights to a tract of forest. The harvesting agreement would allow 25% of the timber to be cut in each of
Find the chance of a recession : The probability of a boom is 60 percent while the chance of a recession is 40 percent. Given this information, which one of these two stocks should you prefer a
Benefit of compound growth : Suppose that Joe receives $1,000 gift from his grandparents upon graduation from college. Joe took a personal finance class and understands the benefit of compo
Product category of personal interest : Select a product category of personal interest and this can range from household goods, smart phones, restaurants, auto manufacturers,

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd