Question

Vaughn Company issues 4,200 shares of restricted stock to its CFO, Dane Yaping, on January 1, 2017. The stock has a fair value of $131,000 on this date. The service period related to this restricted stock is 4 years. Vesting occurs if Yaping stays with the company for 4 years. The par value of the stock is $6. At December 31, 2018, the fair value of the stock is $143,000.

(a) Prepare the journal entries to record the restricted stock on January 1, 2017 (the date of grant), and December 31, 2018.

(b) On March 4, 2019, Yaping leaves the company. Prepare the journal entry to account for this forfeiture.

Answer 1

Journal Entry- Vaughn Company
Date	Account Titles and Explanation	Debit	Credit
1- Jan 2017	Unearned Compensation	$131,000
	Common Stock (4200 X $6)		$25,200
	Paid-In Capital In Excess Of Par		$105,800
31-Dec-2018	Compensation Expens ($131,000 / 4)	$32,750
	Unearned Compensation		$32,750
04-Mar-2019	Common Stock	$25,200
	Paid-In Capital In Excess Of Par - Commonstock	$105,800
	Unearned Compensation		$25,200
	Compensation Expense		$105,800