Answer and Explanation:
The journal entries are as follows
a.
On Jan 1, 2012
Unearned compensation $121,000
To common stock $14,370 (4,790 shares × $3)
To Paid in capital in excess of par value $106,630
(Being the issuance of the restricted stock is recorded)
For recording this we debited the unearned compensation as it decreased the liability and credited the common stock and paid in capital as it increased the stockholder equity
On Dec 31, 2013
Compensation expenses $30,250 ($121,000 ÷ 4 years)
To unearned compensation $30,250
(Being the compensation expense is recorded)
For recording this we debited the compensation expenses as it increased the expenses and credited the unearned compensation as it also increased the laibilities
b.
On Mar 4, 2014
Common stock $14,370 (4,790 shares × $3)
Paid in capital in excess of par value $106,630
To compnesation expenses $60,500 ($30,250 × 2 years)
To Unearned compensation $60,500 ($30,250 × 2 years)
(Being the forefieture of restricted stock is recorded)
For recording this we debited the common stock and paid in capital as it decreased the stockholder equity and credited the compensation expense & unearned compensation as it decreased the expenses and increased the liabilities
