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Oksana_A [137]
3 years ago
15

On January 1, 2021, Tru Fashions Corporation awarded restricted stock units (RSUs) representing 22 million of its $1 par common

shares to key personnel, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. On the grant date, the shares had a market price of $4.20 per share. Required: 1. Determine the total compensation cost pertaining to the RSUs. 2. Prepare the appropriate journal entry to record the award of RSUs on January 1, 2021. 3. Prepare the appropriate journal entry to record compensation expense on December 31, 2021. 4. Prepare the appropriate journal entry to record compensation expense on December 31, 2022. 5. Prepare the appropriate journal entry to record compensation expense on December 31, 2023. 6. Prepare the appropriate journal entry to record the lifting of restrictions on the RSUs and issuing shares at December 31, 2023.
Business
1 answer:
Vikentia [17]3 years ago
6 0

Answer:

1.$92.4million

2. January 1, 2021

No journal entry

3. December 31, 2021

December 31, 2022

Dr Compensation expense $30.8million

Cr Paid in capital -restricted stock $30.8million

4. December 31, 2022

Dr Compensation expense $30.8million

Cr Paid in capital -restricted stock $30.8million

5. December 31, 2023

Dr Compensation expense $30.8million

Cr Paid in capital -restricted stock $30.8million

6. December 31, 2023

Dr Paid in capital -restricted stock $92.4million

Cr Common stock $22 million

Cr Paid in capital-excess of par $70.4 million

Explanation:

1. Calculation to determine the total compensation cost pertaining to the RSUs

Total compensation cost =$4.20 fair value per share × 22 million shares represented by RSUs granted

Total compensation cost=$92.4million

Therefore the total compensation cost pertaining to the RSUs is $92.4million

2. Preparation of the appropriate journal entry to record the award of RSUs on January 1, 2021

January 1, 2021

No journal entry

3.Preparation of the appropriate journal entry to record compensation expense on December 31, 2021

December 31, 2021

Dr Compensation expense $30.8million

Cr Paid in capital -restricted stock $30.8million

($92.4million/3 years)

4. Preparation of the appropriate journal entry to record compensation expense on December 31, 2022

December 31, 2022

Dr Compensation expense $30.8million

Cr Paid in capital -restricted stock $30.8million

($92.4million/3 years)

5. Preparation of the appropriate journal entry to record compensation expense on December 31, 2023.

December 31, 2023

Dr Compensation expense $30.8million

Cr Paid in capital -restricted stock $30.8million

($92.4million/3 years)

6. Preparation of the appropriate journal entry to record the lifting of restrictions on the RSUs and issuing shares at December 31, 2023.

December 31, 2023

Dr Paid in capital -restricted stock $92.4million

Cr Common stock $22 million

Cr Paid in capital-excess of par $70.4 million

($92.4million-$22 million)

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Journalizing issuance of stock—at par and at a premium
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Answer:

a.

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Learn more about character traits from:

brainly.com/question/18597344

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Answer:

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