Accounting for Restricted Stock Awards Geelong Technology (GT) is a software company based in Boston. Since January...

70.2K

Verified Solution

Question

Accounting

Accounting for Restricted Stock Awards
Geelong Technology (GT) is a software company based in Boston.Since January 1, 2015, the company has granted restricted stock toits CEO at the beginning of each year to help boost future companyperformance. Vesting for each award occurs if the CEO staysemployed at the company for a period of two years from the grant ofthe award.
The par value of the stock is $1.

Grant Date
Number of shares
Fair value per share
Service period
1/1/2015
10,000
$6
1 year
1/1/2016
15,000
$8
2 years
1/1/2017
15,000
$10
2 years
1/1/2018
20,000
$11
3 years
It is now September 13, 2018 and the CEO leaves the company.
** Provide in journal entry format the reversal journal entry(s)to correct the CEO's early departure. (Keep in mind the two yearaward process)

Answer & Explanation Solved by verified expert

4.1 Ratings (687 Votes)

Journal Entries Grant date 112015 Contra EquityUnearned Compensation Dr 60000 To Common stock APICCommon Stock 60000 Being restricted stock recorded on grant date On 112016 Retained EarningsSBC Expenses Dr 60000 To Contra equityUnearned Compensation 60000 As entry made for whole amount as its completion of service See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Accounting for Restricted Stock AwardsGeelong Technology (GT) is a software company based in Boston.Since January 1, 2015, the company has granted restricted stock toits CEO at the beginning of each year to help boost future companyperformance. Vesting for each award occurs if the CEO staysemployed at the company for a period of two years from the grant ofthe award.The par value of the stock is $1. Grant DateNumber of sharesFair value per shareService period1/1/201510,000$61 year1/1/201615,000$82 years1/1/201715,000$102 years1/1/201820,000$113 yearsIt is now September 13, 2018 and the CEO leaves the company.** Provide in journal entry format the reversal journal entry(s)to correct the CEO's early departure. (Keep in mind the two yearaward process)

Grant Date	Number of shares	Fair value per share	Service period
1/1/2015	10,000	$6	1 year
1/1/2016	15,000	$8	2 years
1/1/2017	15,000	$10	2 years
1/1/2018	20,000	$11	3 years