Question - On January 1, 2011, Scooby corporation granted 10,000 options to key executives. Each option allows the executive to purchase one share of Scooby's $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginnning January 1, 2013, if the grantee is still employed by the company at the time of the exercise. On the grant date, Scooby's stock was trading at $25 per share, and a fair value option-pricing model determines total compensation to be $450,000.
On May 1, 2013, 9000 options were excercised when the market price of Scooby's stock was $30 per share. The remaining options lapsed in 2015 because executives decided not to exercise their options.
Prepare the necessary journal entries related to the stock option plan for the years 2011 through 2015.