Kieso, Intermediate Accounting, 16e ORION Dow at Exercise 16-13 Grouper Company
ID: 2408955 • Letter: K
Question
Kieso, Intermediate Accounting, 16e ORION Dow at Exercise 16-13 Grouper Company issues 3,700 shares of restricted stock to its CFO, Dane Yaping, on January 1, 2017. The stock has a fair value of $129,000 on this date. The service period related to thi 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 $131,000. (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 Do not indent manually,. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Debit entered (b) On manually. If no entry is 4, 2019, Yaping leaves the company. Prepare the journal entry to account for this forfeiture. (Credit account titles are 3/4/19Explanation / Answer
(a) Prepare the necessary journal entries to record the restricted stock on January 1, 2017 (the date of grant), and December 31, 2018 Date Account titles Debit Credit 01-01-2017 Unearned Compensation $129000 To Common stock (3700*$5) $18500 To Paid-in Capital Excess of Par— Common stock $110,500 (being Granting of restricted stock has been recorded) 12-31-2018 Compensation Expense $32250 To Unearned Compensation ($129000/4) $32250 (being Compensation expenses has been recorded) (b) On March 4, 2019, Yaping leaves the company. Prepare the journal entry (if any) to account for this forfeiture. 03-04-2019 Common Stock $18500 Paid-in Capital Excess of Par— Common stock $110500 To Unearned compensation $64500 To Compensation Expense $64500 (Being forfeiture has been recorded)
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