Rutter Inc. granted 300,000 stock options to executives and employees on January 1, 2017. The options...

Rutter Inc. granted 300,000 stock options to executives and employees on January 1, 2017. The options have a strike price is $10 per share and expire in 2019. The par value of the common stock is $1. Using an option pricing model, the company calculates a fair value of $20 per share. The expected service period, or benefit period, is 3 years.

a. Prepare the journal entries for 2017 and 2018.

b. In 2019, 30% of the options are exercised and the remaining options expire.

Expert Solution

ekkarill92 answered 8 months ago

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