On January 1, 2024, Ball Brothers Enterprises (BBE) granted restricted stock units (RSUS) representing 40 million of its $1 par common shares to executives, subject to forfelture if employment is terminated within four 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 $10 per share on the grant date. At the date of grant, BBE anticipated that 5% of the recipients would leave the firm prior to vesting. Ignore taxes. Required: 1. Prepare the appropriate Journal entry to record compensation expense on December 31, 2024. 2. Prepare the appropriate journal entry to record compensation expense on December 31, 2025. 3. During 2026, BBE revised its estimate of forfeltures from 5% to 10%. Prepare the appropriate Journal entry to record compensation expense on December 31, 2026. 4. Prepare the appropriate journal entry to record compensation expense on December 31, 2027.

On January 1, 2024, Ball Brothers Enterprises (BBE) granted restricted stock units (RSUS) representing 40 million of its $1 par common shares to executives, subject to forfelture if employment is terminated within four 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 $10 per share on the grant date. At the date of grant, BBE anticipated that 5% of the recipients would leave the firm prior to vesting. Ignore taxes. Required: 1. Prepare the appropriate Journal entry to record compensation expense on December 31, 2024. 2. Prepare the appropriate journal entry to record compensation expense on December 31, 2025. 3. During 2026, BBE revised its estimate of forfeltures from 5% to 10%. Prepare the appropriate Journal entry to record compensation expense on December 31, 2026. 4. Prepare the appropriate journal entry to record compensation expense on December 31, 2027.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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EG Corporation granted restricted stock units (RSUS) representing 32 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four 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 $6 per share on the grant date. Required: (1.) Ignoring taxes, determine the total compensation cost pertaining to the restricted stock units. (2.) What is the effect on earnings in the year after the shares are granted to executives? Edit View Insert Format Tools Table
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