Business, 23.05.2020 23:01, mimireds8573

DeWalt Corporation approved a stock option plan for key executives. On January 1, 2019, 20 million stock options were granted, exercisable for 20 million shares of DeWalt's common stock ($1 par). The options are exercisable between January 1, 2022, and December 31, 2024, at the market price on January 1, 2019, which was $12. The fair value of the 20 million options is $3 per option, as estimated by an appropriate option pricing model. DeWalt chooses the option to recognize forfeitures only when they occur. 2 million of the options were forfeited when an executive resigned in 2020. All other options were exercised on August 1, 2023, when the stock price was $39 per share.
Required:
1. Prepare the necessary journal entries.
2. Record compensation expense on December 31, 2020.
3. Record compensation expense on December 31, 2021.
4. Record the exercise of the options in 2023.

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DeWalt Corporation approved a stock option plan for key executives. On January 1, 2019, 20 million s...