Answer:
TOTAL COMPENSATION EXPENSE
=> 70 MILLION * 4 PER OPTION => 280 MILLION
B
COMPENSATIO EXPENSE ON 31ST DEC 2016
[(70 * 4 ) / 4] * 1 => 70 MILLION
1.EMPLOYEE COMPENSATION EXPENSE A/C DR. $70 MILLION
TO EMPLOYEE STOCK OPTION A/C CR. $ 70 MILLION
[BEING EXPENSES RECOGNISED]
2. PROFIT AND LOSS A/C DR. $70 MILLION
TO EMPLOYEE COMPENSATION EXPENSE A/C CR. $ 70 MILLION
[ BEING EXPENSES TRANSFERRED TO PROFIT AD LOSS A/C]
ANSWER C
1. BANK A/C DR. $1890 MILLION
TO EMPLOYEE STOCK OPTION A./C CR. $ 1890 MILLION
[ BEING AMOUNT RECEIVED ON EXCERSING OF OPTIONS]
2. EMPLOYEE STOCK OPTION A/C DR $ 2170 MILLION
TO EQUITY SHARE CAPITAL A/C CR $ 70 MILLION
TO SECURITY PREMIUM A/C CR. $ 2100 MILLION
[ BEING SHARES ISSUED TO EMPLOYEES]