Hua Xin Services offered an incentive stock option plan to its employees. On January 1, 2024, options were granted for 79,000 $1 par common shares.
The exercise price equals the $4 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2027, and
expire December 31, 2028. Each option has a fair value of $1 based on an option pricing model.
What is the entry to record the expiration of 10% of the options on December 31, 2028?
Multiple Choice
Account Title
Paid-in capital-stock options
Compensation expense
Debit Credit
7,900
7,900
Account Title
Debit Credit
Stock options receivable
31,600
Common stock
7,900
Paid-in capital-excess of par
23,700
Account Title
Debit
Credit
Paid-in capital-stock options
7,900
Retained earnings
7,900