Question

Karlovac Motor's disclosure notes for the year ending December 31, 2015, included the following regarding its $0.001 par common stock:

Employee Stock Purchase Plan

Employees are eligible to purchase common stock through payroll deductions of up to 20% of their eligible compensation, subject to any plan limitations. The purchase price of the shares on each purchase date is equal to 80% of the lower of the fair market value of our common stock on the first and last trading days of each six-month offering period. During the years ended December 31, 2015, 2014 and 2013, 222,371, 165,400 and 520,273 shares were issued under the ESPP for $39.3 million, $30.4 million and $15.6 million, respectively. A total of 3,633,749 shares of common stock have been reserved for issuance under the ESPP, and there were 2,133,851 shares available for issuance under the ESPP as of December 31, 2015.

Required:

Prepare the journal entry that summarizes employee share purchases for the year ending December 31, 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions. Be sure to include all accounts involved in the transaction, even if the rounded amount is less than $1 million.)

Answer 1

Date	Account titles and Explanation	Debit (in $)	Credit (in $)
Dec - 31 , 2015	Cash	$39.30
	Compensation expense [($39.30 / 80%) x 20%	$9.8
	Common stock                    [$221,371 × $0.001]/1,000,000		$0
	Paid­ in capital—excess of par                              (bal. fig)		$49.10