Essay
On January 1, 2021 Taffy Inc. granted 210,000 stock appreciation rights (SARs)to its executives. Each SAR entitled its holder to receive cash equal to the difference between the market price of the common share and the benchmark price of $16. The SARs vested after three years and expired on Dec. 31, 2023. On January 1, 2024, 100,000 SARs are exercised. The market price of the shares remained at $20. On January 1, 2025, 50,000 SARS are exercised. The market price of the shares remained at $22. The remaining SARs expired.
Pertinent stock-related data are listed below: 
Required:
a. Prepare the journal entry at December 31, 2021, to record compensation expense.
b. Prepare the journal entry at December 31, 2022, to record compensation expense.
c. Prepare the journal entry at December 31, 2023, to record compensation expense.
d. Prepare the journal entry at January 1, 2024, to record the partial exercise of the SARs.
e. Prepare the journal entry at December 31, 2024, to record compensation expense.
f. Prepare the journal entry at January 1, 2025, to record the partial exercise of the SARs.
g. Prepare the journal entry at December 31, 2025, to record compensation expense.
h. Prepare the journal entry at December 31, 2026, to record compensation expense.
Correct Answer:
Verified
Correct Answer:
Verified
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