Reference no: EM133175009

Question - On January 1, 2020, Spring Co. awards 10,000 stock options to acquire 10,000 shares of common stock ($1 par value) to executives at an exercise price of $30 per share. The market price of Spring Co. common stock on the grant date is $30 per share. The options are exercisable after January 1, 2024, and expire when the employee leaves the company or on December 31, 2026, whichever is first. Management estimates through a fair value option-pricing model that total compensation expense is $130,000. The requisite service period is considered to be 4 years. Spring Co.'s policy is to record forfeitures as they are incurred. Determine compensation expense in 2021 considering 1,500 shares were forfeited in that year.

For BE27, What is the journal entry for the exercise of all of the remaining stock options after the forfeiture? ALSO, What is the effect on TSE for the exercise of the remaining stock options? Points to be determined.