Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock...
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Accounting
MagneticOptical Corporation offers a variety of sharebased compensation plans to employees. Under its restricted stock unit plan, the company on January granted restricted stock units RSUs representing million of its $ par common shares to various division managers.
The shares are subject to forfeiture if employment is terminated within three years.
The common shares have a market price of $ per share on the grant date.
Managements policy is to estimate forfeitures.
Required:
Determine the total compensation cost pertaining to the RSUs.
Prepare the appropriate journal entry to record the RSUs on January
Prepare the appropriate journal entry to record compensation expense on December
Suppose MagneticOptical expected a forfeiture rate on the RSUs prior to vesting. Determine the total compensation cost.
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