On December 31, 2014, ABC Corporation issued 1,000 shares of restricted stock to

Question

On December 31, 2014, ABC Corporation issued 1,000 shares of restricted stock to its Chief Financial Officer. ABC stock had a fair value (closing market price) of $10 per share on December 31, 2014. Additional information is as follows:                                                                                                                                                                               

                a. The service period related to the restricted stock is 2 years.                                                                                                                                                   

                b. Vesting occurs if the CFO stays with the company for a two-year period.                                                                                                                                                         

                c. The par value of the common stock is $3 per share.                                                                                                                                                    

Make the appropriate accounting entry as of the grant date, 12/31/14. Note: use the alternative method as described in your textbook for deferred compensation.                                                                                                                                                                                                               

I came up with the following calculation but don’t know how to journalize:

1,000*$3 = 3,000 common stock

1,000*$7= 7,000 additional PIC                                  

Explanation / Answer

ans) 12/31/14 Unearned compensarion 10,000

Common stock 3000

Paid in capital common stock 7000

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