What xyz should recognize compensation expense

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On January 1, 2018, XYZ Company granted Zack Williamson, an employee, an option to buy 400 shares of XYZ Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $5,400. Williamson exercised his option on September 1, 2018, and sold his 400 shares on December 1, 2018.

Quoted market prices of XYZ Co. stock during 2018 were:

January 1 $30 per share

September 1 $36 per share

December 1 $40 per share

Question 1: The service period is for two years beginning January 1, 2018. As a result of the option granted to Williamson, using the fair value method, XYZ should recognize compensation expense for 2018 on its books in the amount of

Reference no: EM132495651

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