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Lana71 [14]
3 years ago
5

Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2021, options were granted for 75,000 $1 par c

ommon shares. The exercise price equals the $6 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model. Which is the correct entry to record compensation expense for the year 2021
Business
1 answer:
harkovskaia [24]3 years ago
5 0

Answer:

Dr Compensation expense $12,500

Cr Paid-in capital - stock options $12,500

Explanation:

Preparation of the correct entry to record compensation expense for the year 2021

Based on the information given the correct journal entry to record compensation expense for the year 2021 is :

Dr Compensation expense $12,500

Cr Paid-in capital - stock options $12,500

[(75,000 x $1)/6]

(Being to record compensation expense for the year 2021)

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An economic structure in which judgements about what to manufacture and in what amounts are determined by the markets consumers
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An economic structure in which judgments about what to manufacture and in what amounts are determined by the markets consumers and retailers is known as a free-market system

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<h3>What is the free-market system?</h3>

Generally, A market economy is an economy in which choices about investment, production, and distribution to consumers are led by the price signals that are formed by the forces of supply and demand. This kind of economic system is known as a free market economy.

In conclusion, A free market system is an economic framework in which decisions on what to make and in what quantities are set by the customers and retailers in the market.

This kind of system is also known as a consumer-driven economy.

Read more about the free-market system

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