Recording Entries for Restricted Stock Unit Plan In late 2020, the board of directors of Arches Corp. approved a restricted stock unit plan to be awarded to select employees. The plan included the following general terms. Each restricted stock unit is equivalent to one share of $5 par value, common stock of Arches Corp. The restricted stock units vest two years after the date of the grant. Shares are distributed after the vesting period if the employee is still employed by the company. On December 31, 2020, 15,600 restricted stock units were granted to key employees under this plan when the market price of the common stock was $18 per share. Required a. Compute the total amount of compensation cost for the restricted stock unit plan. b. Prepare the journal entry on the date of grant, December 31, 2020. c. Prepare the journal entry on December 31, 2021. d. Prepare the journal entry on December 31, 2022, including the issuance of the shares of stock. Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Recording Entries for Restricted Stock Unit Plan

In late 2020, the board of directors of Arches Corp. approved a restricted stock unit plan to be awarded to select employees. The plan included the following general terms.

Each restricted stock unit is equivalent to one share of $5 par value, common stock of Arches Corp.
The restricted stock units vest two years after the date of the grant.
Shares are distributed after the vesting period if the employee is still employed by the company.

On December 31, 2020, 15,600 restricted stock units were granted to key employees under this plan when the market price of the common stock was $18 per share.

Required

a. Compute the total amount of compensation cost for the restricted stock unit plan.
b. Prepare the journal entry on the date of grant, December 31, 2020.
c. Prepare the journal entry on December 31, 2021.
d. Prepare the journal entry on December 31, 2022, including the issuance of the shares of stock.

Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).
Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.

Recording Entries for Restricted Stock Unit Plan
In late 2020, the board of directors of Arches Corp. approved a restricted stock unit plan to be awarded to select employees. The plan included the following general terms.
o Each restricted stock unit is equivalent to one share of $5 par value, common stock of Arches Corp.
o The restricted stock units vest two years after the date of the grant.
o Shares are distributed after the vesting period if the employee is still employed by the company.
On December 31, 2020, 15,600 restricted stock units were granted to key employees under this plan when the market price of the common stock was $18 per share.
Required
a. Compute the total amount of compensation cost for the restricted stock unit plan.
$ 140400
b. Prepare the journal entry on the date of grant, December 31, 2020.
c. Prepare the journal entry on December 31, 2021.
d. Prepare the journal entry on December 31, 2022, including the issuance of the shares of stock.
• Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).
• Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.
Date
Account Name
Dr.
Cr.
b. Dec. 31, 2020 N/A
N/A
c. Dec. 31, 2021 Compensation Expense
140400
Paid-in Capital-Restricted Stock
140400
d. Dec. 31, 2022 Compensation Expense
Paid-in Capital-Restricted Stock
To record compensation cost
Dec. 31, 2022 Paid-in Capital-Restricted Stock
Common Stock
Paid-in Capital in Excess of Par-Common Stock
To record issuance of shares of stock

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