Answer:
See the explanation below.
Explanation:
Total compensation expenses = 25 million * 15 = $375 million
1. On December 31, 2018.
Compensation expenses = $375 million / 3 = $125 million
Journal entries will be as follows:
<u>Details                                               Dr ($'Million)          Cr ($'Million)  </u>
Compensation expenses                       125
Paid-in Capital - Restricted stock                                         125
<u><em>To record the compensation expenses for 2018.                                   </em></u>
2. On December 31, 2019.
Compensation expenses = [$375 million * 96% * (2/3)] - $125 million = $115 million
Journal entries will be as follows:
<u>Details                                               Dr ($'Million)          Cr ($'Million)  </u>
Compensation expenses                       115
Paid-in Capital - Restricted stock                                         115
<u><em>To record the compensation expenses for 2019.                                   </em></u>
3. On December 31, 2020.
Compensation expenses = ($375 million * 96%) - $125 million - $115 million = $120 million
Journal entries will be as follows:
<u>Details                                               Dr ($'Million)          Cr ($'Million)  </u>
Compensation expenses                       120
Paid-in Capital - Restricted stock                                         120
<u><em>To record the compensation expenses for 2020.                                   </em></u>