Explanation:
The Journal entry is given below:-
A 1. On 1 January 2020
Unearned compensation Dr, $445,000
To Common stock (8,900 × $10) $89,000
To Paid-in Capital in Excess of Par -common stock $3,56,000
(Being the restricted stock is recorded)
2. On 31 December 2021
Compensation expenses Dr, ($445,000 × 1÷5) $89,000
To Unearned compensation $89,000
(Being the restricted stock is recorded)
B On 25 July 2024
Common stock $89,000
Paid-in Capital in Excess of Par -common stock $356,000
To compensation expenses $356,000
To unearned compensation $89,000
(Being the forfeiture is recorded)
