On January 1, 2015, Asquith Company Adopts a Performance-Based Stock

Essay

On January 1, 2015, Asquith Company adopts a performance-based stock option plan with a four-year vesting and service period, a $35 exercise price, and a $6 per option fair value. The plan grants a maximum of 2,000 shares of $5 par common stock to each of the company's 30 executives. The number of shares that vest depends on the increase in sales during the service period, based on the following scale: Asquith estimates that sales will increase by 12% during the service period. The estimate is achieved and all options are exercised on January 1, 2019.
Required:
Assuming Asquith uses the fair value method to account for its stock option plan, prepare all of the journal entries over the life of Asquith's stock option plan (2015 through 2019).