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Chapter 16: Q7BE (page 874)

Refer to the data for Barwood Corporation in BE16-6. Repeat the requirements assuming that instead of options, Barwood granted 2,000 shares of restricted stock.

Short Answer

Expert verified

Unearned revenue will be debited by $130,000, common stock will be credited by $10,000, and Paid-in Capital in Excess of Par鈥� Common Stock under the credit of $120,000. Compensation expense will be $65,000 debit for 2017 and 2018, and unearned compensation is $65,000 credit for 2017 and 2018.

Step by step solution

01

The given information is as follows:

Restricted stock 2000 shares

02

Journal entry

Date

Description

DEBIT

CREDIT

1/1/17

Unearned Compensation

$130,000

Common Stock (2,000 X $5)

$10,000

Paid in Capital in Excess of Par鈥� Common Stock

$120,000

Being unearned compensation at par

12/31/17

Compensation Expense

$65,000

Unearned Compensation

$65,000

Being compensation expense incurred

12/31/18

Compensation Expense

$65,000

Unearned Compensation

$65,000

Being compensation expense incurred

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Most popular questions from this chapter

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