Question

To encourage employee ownership of the company's common shares, KL Corp. permits any of its employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchased at a 13% discount. During May, employees purchased 15,000 shares at a time when the market price of the shares on the New York Stock Exchange was $13 per share. KL will record compensation expense associated with the May purchases of:

Answer 1

$25,350

Step-by-step explanation:

Calculation to determine what KL will record compensation expense associated with the May purchases of

Compensation expense =[(15,000 shares

x $13 per share)*13%]

Compensation expense =$195,000 x 13%

Compensation expense =$25,350

Therefore KL will record compensation expense associated with the May purchases of $25,350