Business, 25.03.2021 22:40 prettygirl1053473

On January 1, 2021, Tru Fashions 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:
a. Determine the total compensation cost pertaining to the RSUs.
b. Prepare the appropriate journal entry to record the award of RSL's on January 1, 2021.
c. Prepare the appropriate journal entry to record compensation expense on December 31, 2021.
d. Prepare the appropriate journal entry to record compensation expense on December 31, 2022.
e. Prepare the appropriate journal entry to record compensation expense on December 31, 2023.
f. Prepare the appropriate journal entry to record the lifting of restrictions on the RSUs and issuing shares at December 31, 2023.

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Answer from: joyce945

1.$30 million

2b. No ournal entry required

3 c. Dr. compensation expense $10million

Cr. paid in capital - restricted stock $10million

4. Dr. compensation expense $10million

Cr. paid in capital - restricted stock $10million

5. e. Dr. compensation expense $10million

Cr. paid in capital - restricted stock $10million

6.f Dr. paid in capital - restricted stock $30million

Cr. common stock $12million

paid in capital - excess of par $18million

Explanation:

1. Calculation to determine Determine the total compensation cost pertaining to the RSUs.

Total compensation cost pertaining to the RSUs.

=$2.50 fair value per share × 12million shares represented by RSUs granted

Total compensation cost pertaining to the RSUs=$30million

2.b. Preparation of the appropriate journal entry to record the award of RSL's on January 1, 2021.

No ournal entry required

3 c. Preparionn of the appropriate journal entry to record compensation expense on December 31, 2021.

Dr. compensation expense $10million

($30 million/3 years )

Cr. paid in capital - restricted stock $10million

4. d. Preparation of the appropriate journal entry to record compensation expense on December 31, 2022.

Dr. compensation expense $10million

Cr. paid in capital - restricted stock $10million

($30 million/3 years )

5. e. Preparation of the appropriate journal entry to record compensation expense on December 31, 2023.

Dr. compensation expense $10million

Cr. paid in capital - restricted stock $10million

($30 million/3 years )

6.f Preparation of the appropriate journal entry to record the lifting of restrictions on the RSUs and issuing shares at December 31, 2023.

Dr. paid in capital - restricted stock $30million

Cr. common stock $12million

paid in capital - excess of par $18million

($30 million-$12 million)

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On January 1, 2021, Tru Fashions Corporation awarded restricted stock units (RSUs) representing 12 m...

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