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2 May, 04:18

The Peach Corporation provides restricted stock to certain executives. Under the plan, the company granted 30 million shares on January 1, 2021, which vest in four years. The fair value of the shares is $14. No forfeitures are anticipated. Ignore taxes. Required: 1. Determine the total compensation cost pertaining to the restricted stock. 2. & 3. Prepare the appropriate journal entries (if any).

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  1. 2 May, 04:29
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    1. Determine the total compensation cost pertaining to the restricted stock.

    30 million x $14 = $420 million

    2. Prepare the appropriate journal entries

    December 31, Year 1:

    Dr Stock compensation expense 105,000,000

    Cr Additional paid in capital - restricted stock 105,000,000

    December 31, Year 2:

    Dr Stock compensation expense 105,000,000

    Cr Additional paid in capital - restricted stock 105,000,000

    December 31, Year 3:

    Dr Stock compensation expense 105,000,000

    Cr Additional paid in capital - restricted stock 105,000,000

    December 31, Year 4:

    Dr Stock compensation expense 105,000,000

    Cr Additional paid in capital - restricted stock 105,000,000

    January 1, Year 4, the stocks are handed out:

    Dr Additional paid in capital - restricted stock 420,000,000

    Cr Common stock 420,000,000
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