Question

Exercise 16-13

Marigold Company issues 4,200 shares of restricted stock to its CFO, Dane Yaping, on January 1, 2020. The stock has a fair value of $129,000 on this date. The service period related to this restricted stock is 4 years. Vesting occurs if Yaping stays with the company for 4 years. The par value of the stock is $5. At December 31, 2021, the fair value of the stock is $146,000.

(a) Prepare the journal entries to record the restricted stock on January 1, 2020 (the date of grant), and December 31, 2021. (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
Jan. 1, 2020Dec. 31, 2021Mar. 4, 2022
Jan. 1, 2020Dec. 31, 2021Mar. 4, 2022

(b) On March 4, 2022, Yaping 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
Mar. 4, 2022

Answer 1

1. Jan 2020

Unearned Compensation a/c Dr. $1,29,000

To Common Stock ( 4500 * $ 5) Cr. 21000

To Paid in Capital in Excess of par Cr.108000

(To record the issuance of restricted stock)

2. Dec 31 2021

Compensation Expense ($129,000/4)a/c Dr. $32 ,250

To Unearned Compensation A/c Cr. $32, 250

(To record compensation expense for the year related to restricted stock)

Mar 4.2022

Common Stock A/c Dr. $ 100,000

Paid-in Capital in Excess of Par - Common Stock Dr. $ 108,000

To Compensation Expense A/c Cr. $ 129000

To Unearned Compensation A/c Cr.$ 79,000

( To record forfeiture of restricted stock)