On january 1, 2021, cullumber inc. granted stock options to officers and key employees for the purchase of 21,000 shares of the company’s $10 par common stock at $25 per share. the options were exercisable within a 5-year period beginning january 1, 2023, by grantees still in the employ of the company, and expiring december 31, 2027. the service period for this award is 2 years. assume that the fair value option-pricing model determines total compensation expense to be $328,400. on april 1, 2022, 2,100 options were terminated when the employees resigned from the company. the market price of the common stock was $36 per share on this date. on march 31, 2023, 12,600 options were exercised when the market price of the common stock was $40 per share. prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended december 31, 2021, 2022, and 2023.

Answer & Explanation:

December 31, 2021

Compensation Expense                                              164,200

                        Paid-in Capital (328,400 x 0.5)                        164200

                      To record compensation expense

April 1, 2022

Paid-in Capital                                                               32,840

          Compensation Expense (328,400 x 2100/21000)    32,840

         To record termination of stock option

December 31, 2022

Compensation Expense                                                147,780

          Paid-in Capital (328,40 x 1/2 x 18900/21000)              147,780

        To record compensation expense

March 31 , 2023

Cash ( 12,600 x $25)                                                        315,000

Paid-in Capital (328,400 x 12,600/21,000)                      197040

            Common Stock (21,000 x $10)                                            126,000

             Paid-in Capital in Excess of Par                                         386,040

         To record exercise of stock option

December 31, 2023

6,300 stock options not exercised (21,000 - 2,100 - 12,600)

answer; communities of interest; i believe this is correct, plz check first good luck;

answer; break-even analysis;