On January 1, 2021, M. T. Toombe Mausoleum granted restricted stock units (RSUs) representing 60 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $15 per share on the grant date. At the date of grant, Toombe anticipated that 5% of the recipients would leave the firm prior to vesting. In 2022, 3% of the options are forfeited due to executive turnover. Toombe chooses the option not to estimate forfeitures. Required:
1. Prepare the appropriate journal entry to record compensation expense on December 31, 2021. Ignore taxes.
Record the compensation expense on December 1, 2021 for award of restricted stock units (RSUs) representing 60 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares had a market price of $15 per share on the grant date. Toombe anticipated that 5% of the recipients would leave the firm prior to vesting.
2. Prepare the appropriate journal entry to record compensation expense on December 31, 2022. Ignore taxes.
Record the compensation expense on December 1, 2022 for award of restricted stock units (RSUs) representing 60 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares had a market price of $15 per share on the grant date. Toombe anticipated that 5% of the recipients would leave the firm prior to vesting.