Derrick Company issues 4,000 restricted shares to its CFO, Dane Yaping, on January 1, 2010. The shares have a fair value of $120,000 on this date. The service period related to these restricted shares is 4 years. Vesting occurs if Yaping stays with the company for 4 years. The par value of the shares is $5. At December 31, 2011, the fair value of the shares is $145,000.
(a) Prepare the journal entries to record the restricted shares on January 1, 2010 (the date of grant), and December 31, 2011.
(b) On March 4, 2012, Yaping leaves the company. Prepare the journal entry (if any) to account for this forfeiture.