Answer:
The journal entries are as follows:
(a) (i) on January 1, 2014
Unearned compensation A/c Dr. $5,75,000
To Common stock (11,500 × 10) $115,000
To Paid-in Capital in Excess of Par - Common Stock $4,60,000
(ii) On December 31, 2015
compensation expenses A/c(575,000 × 1/5) Dr. $1,15,000
To Unearned compensation $1,15,000
(To record the restricted stock)
(b) On July 25, 2018,
common stock A/c Dr. $1,15,000
Paid-in Capital in Excess of Par - Common Stock A/c Dr. $4,60,000
To compensation expenses $4,60,000
To unearned compensation $1,15,000
(To record the forfeiture)