Answer:
Debit Cash for $270,000
Debit Paid-in capital-stock options for $54,000
Credit Common stock for $54,000
Credit Paid-in capital—excess of par for $270,000
Explanation:
Cash from he exercise of 90% = 60,000 * 90% * $5 = $270,000
Paid-in-capital for the stock options = $60,000 * 90% = $54,000
Common stock = 60,000 * 90% * $1 = $54,000
The the correct entry to record the exercise of 90% the options on April 15, 2024, when the market price of the stock was $8 will now be as follows:
Details Dr ($) Cr ($)
Cash 270,000
Paid-in capital-stock options 54,000
Common stock 54,000
Paid-in capital—excess of par 270,000
To record the exercise of 90% of the stock options.
