Common stock issued to employees through the exercise of stock warrants under a stock option plan that is classified as a noncompensatory stock option plan is recorded by the corporation at the
A)market price of the stock
B)option price of the stock
C)market price of the stock at the first date that the warrant can be exercised
D)option price of the stock plus the value assigned to the stock warrant

Question

Quizplus · Accepted Answer

Noncompensatory stock option plans are those plans that are offered to all employees and the exercise price of the option is equal to the market price of the stock at the time of grant. Therefore, when employees exercise their stock warrants under these plans, the corporation records the issuance of common stock at the option price of the stock.

Common Stock Issued to Employees Through the Exercise of Stock