On January 1, 2018, David Mest Communications granted restricted stock units (RSUs) representing 30 million of its

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On January 1, 2018, David Mest Communications granted restricted stock units (RSUs) representing 30 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $12 per share on the grant date. At the date of grant, Mest anticipated that 6% of the recipients would leave the firm prior to vesting. On January 1, 2019, 5% of the RSUs are forfeited due to executive turnover. Mest chooses the option to account for forfeitures when they actually occur.

Required:

1. Prepare the appropriate journal entry to record compensation expense on December 31, 2018.

2. Prepare the appropriate journal entry to record compensation expense on December 31, 2019.

3. Prepare the appropriate journal entry to record compensation expense on December 31, 2020.

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Intermediate Accounting

ISBN: 9781259722660

9th Edition

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

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