Lawson will award 100,000 shares of its $1 par value common stock through a restricted stock awards (“RSA”) plan available to its officers and employees.  Because officers and employees awarded through this RSA plan will receive shares of stock at the award date instead of options, Lawson has decided to reduce the number of shares available in total under the plan as compared to the stock option plan outlined above.   Officers and employees are expected to stay employed with Lawson Company for 3 years from the date of award in order to fulfill their service period.  The CFO has performed a fair value calculation and has projected that the fair value of these awards at the award date will approximate $2,700,000.  Lawson’s tax rate is 21%. 

Based upon the information provided, prepare the journal entries and any other financial analysis necessary to demonstrate the financial reporting and tax impact of granting these awards on January 1, 2022, and forward. 

Required: 

Provide the necessary journal entries, if any, Lawson will need to record at

The grant date.

What journal entries (including the deferred income tax expense) will Lawson instead record at December 31, 2022, 2023, and 2024?

What journal entries (including tax) will Lawson record when restrictions are lifted at the end of the three-year vesting, assuming no forfeitures.

Answer rating: 100% (QA)

Step 12 Journal Entries at Grant Date January 1 2022 Cash 2700000 Common Stock 100000 shares 1 par v... View the full answer