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Provide the journal entry

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a. Cardinal Inc., which has a fiscal year end of December 31, granted 1,000 stock options to its CEO as a form of compensation on January 1, 20X1 (exercise price = $50). When the options were issued they had an intrinsic value of $0 and a fair value of $6,600; on December 31, the options had an intrinsic value of $1,900 and a fair value of $6,200. The options were issued with an expected benefit period (or vesting period) of 3 years. Provide the journal entry that for the compensation expense for fiscal 20X1.

b. Now suppose that on January 1, 20X4, once the options are vested, the CEO will exercise the options. Name the asset (not APIC) that Cardinal Inc. will debit when recording the journal entry for the exercising of the options.

Reference no: EM132966215

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