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A company offers a variety of share-based compensation plans to employees. Under its restricted stock...

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Accounting

A company offers a variety of share-based compensation plans to employees. Under its restricted stock unit plan, the company on January 1 of the current year, granted restricted stock units (RSUs) representing 11 million of its $1 par common shares to various division managers.
The shares are subject to forfeiture if employment is terminated within three years.
The common shares have a market price of $21.00 per share on the grant date.
Managements policy is to estimate forfeitures.
Required:
1. Determine the total compensation cost pertaining to the RSUs.
2. Prepare the appropriate journal entry to record the RSUs on January 1 of the current year.
3. Prepare the appropriate journal entry to record compensation expense on December 31 of the current year.
4. Suppose the company expected a 10% forfeiture rate on the RSUs prior to vesting. Determine the total compensation cost.

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