On March 1, 2013, when the market price of Wilson's stock was $14 per share, 3 million of the options were exercised. The journal entry to record this would include:
A)A debit to paid-in capital - stock options for $42 million.
B)A credit to paid-in capital - excess of par for $255 million
C)A credit to common stock for $75 million
D)All of these are correct.The computation is as follows: Cash: 3 million options 5 shares/option $10/share = $150 million
Paid-in capital-stock options: 3 million options $40/option) = $120 million
Common stock: 15 million shares $1 par/share = $15 million
Paid-in capital in excess of par (to balance) = $255 million

Question

Quizplus · Accepted Answer

The credit to paid-in capital - excess of par for $255 million is correct as it balances the journal entry after accounting for cash received, the par value of common stock issued, and the reduction in paid-in capital - stock options.

On March 1, 2013, When the Market Price of Wilson's