On January 1, 2018, VKI Corporation awarded restricted stock units (RSUs) representing 12 million of its $1 parcommon shares to key personnel, subject to forfeiture if employment is terminated within three years. After therecipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. On the grant date,the shares had a market price of $2.50 per share.Required:1. Determine the total compensation cost pertaining to the RSUs.2. Prepare the appropriate journal entry to record the award of RSUs on January 1, 2018.3. Prepare the appropriate journal entry to record compensation expense on December 31, 2018.4. Prepare the appropriate journal entry to record compensation expense on December 31, 2019.5. Prepare the appropriate journal entry to record compensation expense on December 31, 2020.6. Prepare the appropriate journal entry to record the lifting of restrictions on the RSUs and issuing shares atDecember 31, 2020.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 2018, VKI Corporation awarded restricted stock units (RSUs) representing 12 million of its $1 par
common shares to key personnel, 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. On the grant date,
the shares had a market price of $2.50 per share.
Required:
1. Determine the total compensation cost pertaining to the RSUs.
2. Prepare the appropriate journal entry to record the award of RSUs on January 1, 2018.
3. Prepare the appropriate journal entry to record compensation expense on December 31, 2018.
4. Prepare the appropriate journal entry to record compensation expense on December 31, 2019.
5. Prepare the appropriate journal entry to record compensation expense on December 31, 2020.
6. Prepare the appropriate journal entry to record the lifting of restrictions on the RSUs and issuing shares at
December 31, 2020.

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