Question

Exercise 16-14 Flounder Company issues 11,300 shares of restricted stock to its CFO, Mary Tokar, on January 1, 2017. The stock has a fair value of $565,000 on this date. The service period related to this restricted stock is 5 years. Vesting occurs if Tokar stays with the company until December 31, 2021. The par value of the stock is $10. At December 31, 2017, the fair value of the stock is $584,000. (a) Prepare the journal entries to record the restricted stock on January 1, 2017 (the date of grant), and December 31, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Unearned Compensation 565000 Common Stock 113000 Paid-in Capital in Excess of Par - Common Stock 452000 Compensation Expense 113000 Unearned Compensation 113000 (b) On July 25, 2021, Tokar leaves the company. Prepare the journal entry to account for this forfeiture. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 7/25/21 Click if you would like to Show Work for this question: Open Show Work

Answer 1

solution Date Account title up explanation Debit Gredet a) | 111/2017 | 565000 113000 452000 31/12/2018 113000 Unearned Compensation Common Stock ( 1130 ox 10) Pald in capital-Common stock compensation expenses [565000/ 5] Unearned compensation Common stock Pald in capital-common stock Compensation expenses unearned compensation H3000 25/7/2021 113000 | 452000 452000 113000