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Excercise 16-10 - Paid-in Capital in Excess of Par...

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EXERCISE 16-10 (15–25 minutes) 1/2/10 No entry (total compensation cost is $600,000)12/31/10 Compensation Expense ...................................... 300,000 Paid-in Capital—Stock Options .................. 300,000 [To record compensation expense for 2010 (1/2 X $600,000)]12/31/11Compensation Expense 300,000 ................................................... Paid-in Capital— Stock Options ................................................................ 300,000 [To record compensation expense for 2011 (1/2 X $600,000)] 1/3/12 Cash (30,000 X $40) ...................................... 1,200,000 Paid-in Capital—Stock Options ($600,000 X 30,000/40,000) ........................ 450,000 Common Stock (30,000 X $10) ............. 300,000
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Unformatted text preview: Paid-in Capital in Excess of Par. ......... 1,350,000 (To record issuance of 30,000 shares of $10 par value stock upon exercise of options at option price of $40) (Note to instructor : The market price of the stock has no relevance in the prior entry and the following one.) 5/1/12 Cash (10,000 X $40). ............................................ 400,000 Paid-in Capital—Stock Options ($600,000 X 10,000/40,000). ............................ 150,000 Common Stock. ........................................... 100,000 Paid-in Capital in Excess of Par. ................ 450,000 (To record issuance of 10,000 shares of $10 par value stock upon exercise of options at option price of $40)...
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