Vaughn Company issues 11,300 shares of restricted stock to its CFO, Mary Tokar,
ID: 2342853 • Letter: V
Question
Vaughn Company issues 11,300 shares of restricted stock to its CFO, Mary Tokar, on January 1, 2017. The stock has a fair value of $565,000 on this date. The service period related to this restricted stock is 5 years. Vesting occurs if Tokar stays with the company until December 31, 2021. The par value of the stock is $10. At December 31, 2017, the fair value of the stock is $521,000.
(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 July 25, 2021, Tokar 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
7/25/21
Date
Account Titles and Explanation
Debit
Credit
1/1/1712/31/187/25/21
1/1/1712/31/187/25/21
Explanation / Answer
A
Debit
Credit
01-01-2017
Unearned Compensation(fair Value)
565000
Common Stock(At Par Value)
113000
Paid-in Capital in Excess of Par-Common stock
452000
Dec-31-18
Compensation Expense
1,13,000
Unearned Compensation(565,000/5)
1,13,000
B.
07/25/2021
Common Stock
1,13,000
Paid-in Capital in Excess of Par-Common stock
4,52,000
Unearned Compensation(565,000*1/5)
1,13,000
Compensation Expense(565,000*4/5)
4,52,000
A
Debit
Credit
01-01-2017
Unearned Compensation(fair Value)
565000
Common Stock(At Par Value)
113000
Paid-in Capital in Excess of Par-Common stock
452000
Dec-31-18
Compensation Expense
1,13,000
Unearned Compensation(565,000/5)
1,13,000
B.
07/25/2021
Common Stock
1,13,000
Paid-in Capital in Excess of Par-Common stock
4,52,000
Unearned Compensation(565,000*1/5)
1,13,000
Compensation Expense(565,000*4/5)
4,52,000
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