Compensatory stock options were granted to executives on January 1, 20x3, with a measurement date of June 30, 20x4, for services to be rendered during 20x3, 20x4, and 20x5.The excess of the market value of the shares over the option price at the measurement date was reasonably estimable at the date of grant.The stock option was exercised on October 31, 20x5.Compensation expense should be recognized in the income statement in which of the following years?
A)Choice 1
B)Choice 2
C)Choice 3
D)Choice 4

Question

Compensatory stock options were granted to executives on January 1, 20x3, with a measurement date of June 30, 20x4, for services to be rendered during 20x3, 20x4, and 20x5.The excess of the market value of the shares over the option price at the measurement date was reasonably estimable at the date of grant.The stock option was exercised on October 31, 20x5.Compensation expense should be recognized in the income statement in which of the following years? 
A)Choice 1 
B)Choice 2 
C)Choice 3 
D)Choice 4

Quizplus · Accepted Answer

The Answer of Compensatory stock options were granted to executives on January 1, 20x3, with a measurement date of June 30, 20x4, for services to be rendered during 20x3, 20x4, and 20x5.The excess of the market value of the shares over the option price at the measurement date was reasonably estimable at the date of grant.The stock option was exercised on October 31, 20x5.Compensation expense should be recognized in the income statement in which of the following years? 
A)Choice 1 
B)Choice 2 
C)Choice 3 
D)Choice 4

Compensatory Stock Options Were Granted to Executives on January 1