Solution:
Requirement 1:
Compensation Expense = $ 431,997,580
Calculation of Compensation Expense to be reported for the year ended Dec 31, 2018
Total Compensation cost of RSU`s = Fair Market Value per share * Number of shares awarded/granted
Total Compensation cost of RSU`s = $ 31.91 * 54,152,000 Shares = $ 1,727,990,320
Expense Allocated for one year = Total Compensation / Vesting Period = $ 1,727,990,320 / 4 years = $ 431,997,580.
Requirement 2:
No | Date | General Journal | Debit | Credit |
1 | 31-Dec-17 | Paid-in capital - restricted stock (48350000*$ 17.12) | $ 827,752,000 | |
Common stock (48350000*$ 0.000006) | $ 290 | |||
Paid-in capital - excess of par | $ 827,751,710 | |||
[ To record vesting of RSU` s] |
Notes:
1) Vested shares and their fair value is considered in above calculation.
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