When employees exercise their employee stock options, the firm debits _____ for the proceeds, debits _____ for any amounts credited to that account, credits _____ for the par value of the shares issued and credits _____ for any excess of the cash received plus the amount amortized over the par value of the shares issued.

Question

Quizplus · Accepted Answer

When employees exercise their employee stock options, the firm records the transaction by debiting Cash for the proceeds received, debiting Additional Paid-In Capital (Stock Options) for any amounts previously credited to that account upon the grant of the options, crediting Common Stock for the par value of the shares issued, and crediting Additional Paid-In Capital for any excess of the cash received plus the amount amortized over the par value of the shares issued.

When Employees Exercise Their Employee Stock Options, the Firm Debits