Metropolis Company adopted a stock-option plan on October 12, 2021. The plan provided 20,000 shares of $2 par value common stock to three of its officers: Kent Clark, Lane Lois, and Luther Lexx. On January 1, 2022, stock options were granted to the three officers (one option enables the officer to purchase one share of common stock) as follows: Kent Clark (president): 12,000 options; 8,000 for services performed in 2022, 3,000 for services performed in 2023, and 1,000 for services performed in 2024. Lane Lois (controller): 5,000 options; 2,000 for services performed in 2022, 2,000 for services performed in 2023, and 1,000 for services performed in 2024. Luther Lexx (assistant controller): 3,000 options; 1,000 for services performed in 2022, 1,500 for services performed in 2023, 500 for services performed in 2024. The market value of Metropolis Company common stock at the grant date was $32 per share. The stock options permit the officers to purchase the common stock at a price of $19 per share. The fair value of the options at the grant date was $7 per option. The options can be exercised beginning in 2025, and they expire at the end of 2028. On February 26, 2025, all three officers exercised some of their options, specifically: Kent Clark exercised 7,000 options, Lane Lois exercised 4,000, Luther Lexx exercised 2,000. Required (for credit 1.) Record compensation expense for 2022, 2023, and 2024. 2) Record the exercise of the options on February 26, 2025.
Metropolis Company adopted a stock-option plan on October 12, 2021. The plan provided 20,000 shares of $2 par value common stock to three of its officers: Kent Clark, Lane Lois, and Luther Lexx. On January 1, 2022, stock options were granted to the three officers (one option enables the officer to purchase one share of common stock) as follows: Kent Clark (president): 12,000 options; 8,000 for services performed in 2022, 3,000 for services performed in 2023, and 1,000 for services performed in 2024. Lane Lois (controller): 5,000 options; 2,000 for services performed in 2022, 2,000 for services performed in 2023, and 1,000 for services performed in 2024. Luther Lexx (assistant controller): 3,000 options; 1,000 for services performed in 2022, 1,500 for services performed in 2023, 500 for services performed in 2024. The market value of Metropolis Company common stock at the grant date was $32 per share. The stock options permit the officers to purchase the common stock at a price of $19 per share. The fair value of the options at the grant date was $7 per option. The options can be exercised beginning in 2025, and they expire at the end of 2028. On February 26, 2025, all three officers exercised some of their options, specifically: Kent Clark exercised 7,000 options, Lane Lois exercised 4,000, Luther Lexx exercised 2,000. Required (for credit 1.) Record compensation expense for 2022, 2023, and 2024. 2) Record the exercise of the options on February 26, 2025.
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