Question

EcoMotors's disclosure notes for the year ending December 31, 2017, included the following regarding its $0.001 par common stock: Employee Stock Purchase Plan Our employees are eligible to purchase our common stock through payroll deductions of up to 10% of their eligible compensation, subject to any plan limitations. The purchase price would be 90% of the lower of the fair market value on the first and last trading days of each six-month offering period. During the years ended December 31, 2017, 2016, and 2015, we issued 220,971, 164,000 and 220,971 shares under the ESPP for $37.9 million, $29.0 million and $14.2 million, respectively. There were 3,619,749 shares available for issuance under the ESPP as of December 31, 2017. Required: Prepare the journal entry that summarizes EcoMotors's employee share purchases for the year ending December 31, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Answer 1

ANSWER:

Journal Entry:

Date	Account title	Debit (in millions)	Credit (in millions)
Dec 31, 2017	cash compensation expense ($37.9/90%)x10% Common stock ($220971 x $0.001)/1,000,000 Paid in capital - in excess of par	$37.9 $4.2 . .	. . $0.0 $42.1