Question

On January​ 1, 2017, Bubert Corporation issues 9,000 shares shares of $3

par restricted stock to its key executives. The market value of unrestricted shares of the same stock on the date of issue is $22 and there is a four year vesting period. What is the amount of deferred compensation recorded on January​ 1, 2017?

Answer 1

the following is the journal entry:

jan 1 2017	deferred compensation a/c (9,000 shares*$22)	198,000
	...............To common stock a/c ($3 * 9,000)		27,000
	...............To additional paid in capital ($19*9,000)		171,000

so the deferred compensation recorded will be =$198,000.

Answer 2

the following is the journal entry:

Jan 1 2017	deferred compensation a/c (9,000 shares*$22)	198,000
	To common stock a/c ($3 * 9,000)		27,000
	To additional paid-in capital ($19*9,000)		171,000

so the deferred compensation recorded will be =$198,000.