Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock unit plan,...

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Magnetic-Optical Corporation offers a variety of share-basedcompensation plans to employees. Under its restricted stock unitplan, the company on January 1, 2018, granted restricted stockunits (RSUs) representing 5 million of its $1 par common shares tovarious division managers. The shares are subject to forfeiture ifemployment is terminated within three years. The common shares havea market price of $30.00 per share on the grant date. Management’spolicy is to estimate forfeitures. Required: 1. Determine the totalcompensation cost pertaining to the RSUs. 2. & 3. Prepare theappropriate journal entries. 4. Suppose Magnetic-Optical expected a10% forfeiture rate on the RSUs prior to vesting. Determine thetotal compensation cost.

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Restricted stock units are the stock option plan provided by employer to employees as compensation Under this plan there is restriction on when the units would be sold that is See Answer

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