Question

Cullumber Company issues 4,100 shares of restricted stock to its CFO, Dane Yaping, on January 1, 2017. The stock has a fair value of $118,000 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, 2018, the fair value of the stock is $151,000. 

(a) Prepare the journal entries to record the restricted stock on January 1, 2017 (the date of grant), and December 31, 2018.

(b) On March 4, 2019, Yaping leaves the company. Prepare the journal entry to account for this forfeiture. 

Answer 1

Journal entries
Date	Particulars		Debit	Credit
01-01-2017	unearned compensation		$ 1,18,000.00
	common stock (4100*5)			$ 20,500.00
	paid in capital in excess of par			$ 97,500.00
31-12-2018	Compensation expenses(118000/4)		$     29,500.00
	unearned compensation			$ 29,500.00
03-04-2019	Common stock		$     20,500.00
	paid in capital in excess of par		$     97,500.00
	unearned compensation			$ 59,000.00
	compensation expenses			$ 59,000.00