Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock unit plan,

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Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock unit plan, the company on January 1, 2018, granted restricted stock units (RSUs) representing 4 million of its $1 par common shares to various division managers. The shares are subject to forfeiture if employment is terminated within three years. The common shares have a market price of $22.50 per share on the grant date. Management's policy is to estimate forfeitures.
Required:
1. Determine the total compensation cost pertaining to the RSUs.
2. Prepare the appropriate journal entry to record the RSUs on January 1, 2018.
3. Prepare the appropriate journal entry to record compensation expense on December 31, 2018.
4. Suppose Magnetic-Optical expected a 10% forfeiture rate on the RSUs prior to vesting. Determine the total compensation cost.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Intermediate Accounting

ISBN: 9781259722660

9th Edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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