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Homework:practice exam 2

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Part 1Hillview Homes, Ltd. granted options at the beginning of the current year to all its salaried employees. At the grant date, the options had a fair value of $ 900,000$900,000 and can be exercised only over a 3-year vesting period. At the end of the year, Hillview charged $ 300,000$300,000 to expense, assuming that all employees would vest. Prepare the journal entry to record the compensation expense for Year 2 assuming that Hillview expects only 35 %35% of employees to vest. Assume that Hillview chooses to adjust the fair value for the estimated forfeitures. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining fields in the table blank.) Part 1 [table] | Save Accounting Table... | | + | Copy to Clipboard... | | + [/table] [table] Account | December 31, Year 2 | | | | | | | | [/table] Save Accounting Table...+Copy to Clipboard...+AccountDecember 31, Year 2[Account][Fill in the blank][Fill in the blank][Account][Fill in the blank][Fill in the blank][Account][Fill in the blank][Fill in the blank][Account][Fill in the blank][Fill in the blank] [IMPORTANT INSTRUCTION] When returning answers, provide an array for [Fill in the blank] positions ONLY. Skip [Account] cells (these are dropdowns). If a [Fill in the blank] should be empty, return an empty string "" as a placeholder. The array length should equal the number of [Fill in the blank] cells, not total cells.

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The problem concerns recognizing compensation expense for stock options granted to employees under a vesting schedule, with an adjustment for estimated forfeitures. First, restating the facts helps: Hillview granted options with a grant-date fair value totaling 900,000, exercisable over a 3-year vesting period. At year-end, the company recorded 300,000 of compensation expense under the assumption that all employees would vest. Now, at Year 2, Hillview expects only 35% of employees to vest and is adjusting the fair value for ......Login to view full explanation

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