Pastore Inc. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise price is $35 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $8 per option. If the options have a vesting period of five years, what would be the balance in "Paid-in Capital-Stock Options" three years after the grant date?
A) A credit of $4.8 million.
B) A credit of $16.2 million.
C) A debit of $4.8 million.
D) A debit of $16.2 million.

Question

Quizplus · Accepted Answer

1,000,000 × $8 × 3/5 = $4,800,000