Question

Teal Company issues 4,300 shares of restricted stock to its CFO, Dane Yaping, on January 1, 2017. The stock has a fair value of $123,000 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 $135,000. (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 (b) On March 4, 2019, 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 3/4/19

Answer 1

A)

Unearned compensation	123,000
Common stock (4300*5)		21,500
Paid in capital in excess of par		101,500
Compensation expenses	30,750
Unearned compensation		30750
(123,000/4)

B

Common stock	21,500
Paid in capital in excess of par	101,500
Compensation expense (30,750*2)		61,500
Unearned compensation		61,500

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