Question

Exercise 16-14 Flounder Company issues 11,100 shares of restricted stock to its CFO, Mary Tokar, on January 1, 2017. The stock has a fair value of $555,000 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 $355,000. (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 o 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 o for the amounts.)

Answer 1

(a)
Date	Accounts and explanation	Debit	Credit
01-01-17	Unearned compensation	555000
	common stock		111000
	(11100*10)
	paid in capital in excess of par-common stock		444000
31-12-18	Compensation expense	111000
	unearned compensation		111000
(B)
25-07-21	common stock	111000
	paid in capital in excess of par-common stock	444000
	compensation expense		444000
	Unearned Compensation		111000