As part of its stock-based compensation package, on January 1, 2018, International Electronics granted restricted stock...

As part of its stock-based compensation package, on January 1, 2018, International Electronics granted restricted stock units (RSUs) representing 150 million $1 par common shares. At exercise, holders of the RSUs are entitled to receive cash or stock equal in value to the market price of those shares at exercise. The RSUs cannot be exercised until the end of 2021 (vesting date) and expire at the end of 2023. The $1 par common shares have a market price of $6 per share on the grant date. The fair value at December 31, 2018, 2019, 2020, 2021, and 2022, is $8, $6, $8, $5, and $6, respectively. All recipients are expected to remain employed through the vesting date.

After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares.

Required:

1. to 3. Prepare the appropriate journal entries pertaining to the RSUs on January 1, 2018 and December 31, 2018–December 31, 2021. The RSUs remain unexercised on December 31, 2022, prepare the appropriate entry.
4. The RSUs are exercised on June 6, 2023, when the share price is $6.50, and executives choose to receive cash. Prepare the appropriate journal entry(s) on that date.

Expert Solution

ekkarill92 answered 1 year ago

As part of its stock-based compensation package, on January 1, 2018, Weldon Well Supplies granted restricted...

As part of its stock-based compensation package, on January 1, 2018, Weldon Well Supplies granted restricted stock units (RSUs) representing 100,000 $1 par common shares. At exercise, holders of the RSUs are entitled to receive cash or stock equal in value to the market price of those shares at exercise. The RSUs cannot be exercised until the end of 2021 (vesting date) and expire at the end of 2023. The $1 par common shares have a market price of $5.9...

As part of its stock-based compensation package, International Electronics (IE) granted 10 million stock appreciation rights...

As part of its stock-based compensation package, International Electronics (IE) granted 10 million stock appreciation rights (SARs) to top officers on January 1, 2021. At exercise, holders of the SARs are entitled to receive stock equal in value to the excess of the market price at exercise over the share price at the date of grant. The SARs cannot be exercised until the end of 2024 (vesting date) and expire at the end of 2026. The $1 par common shares...

As part of its stock-based compensation package, International Electronics granted 28 million stock appreciation rights (SARs)...

As part of its stock-based compensation package, International Electronics granted 28 million stock appreciation rights (SARs) to top officers on January 1, 2018. At exercise, holders of the SARs are entitled to receive stock equal in value to the excess of the market price at exercise over the share price at the date of grant. The SARs cannot be exercised until the end of 2021 (vesting date) and expire at the end of 2023. The $1 par common shares have...

part a Under its executive stock option plan, N Corporation granted options on January 1, 2018,...

part a Under its executive stock option plan, N Corporation granted options on January 1, 2018, that permit executives to purchase 15 million of the company's $1 par common shares within the next eight years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, $18 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No...

On January 1, 2018, Lawson Brothers Enterprises (LBE) granted restricted stock units (RSUs) representing 40 million...

On January 1, 2018, Lawson Brothers Enterprises (LBE) granted restricted stock units (RSUs) representing 40 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four 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 $10 per share on the grant date. At the date of grant, LBE anticipated that 5% of the recipients would leave the...

A company granted compensation through restricted shares to four of its executives, with a market value...

A company granted compensation through restricted shares to four of its executives, with a market value of $ 600,000 and a period of service of four years. When granting the compensation plan, the company made the following entry: Deferred compensation 600,000 Common srock 30,000 Paid-in capital in excess of par value 570,000 In each of the first two years the company made the following entry: Compensation expense 150,000 Deferred compensation 150,000 During the third year, one of the executives resigned...

On January 1, 2018, Patriots Co. awarded restricted stock units (RSUs) representing 30 million of its...

On January 1, 2018, Patriots Co. awarded restricted stock units (RSUs) representing 30 million of its $1 par common shares to key personnel, 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. On the grant date, the shares had a market price of $3 per share. Required: Determine the total compensation cost pertaining to the RSUs. Prepare the appropriate journal entry to record...

Lima Corp. offers a variety of share-based compensation plans to employees. Under its restricted stock unit...

Lima Corp. offers a variety of share-based compensation plans to employees. Under its restricted stock unit plan, the company on January 1, 2021, granted restricted stock units (RSUs) representing 7 million of its $1 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 $27.00 per share on the grant date. Management’s policy is to estimate forfeitures. Required: 1. Determine the...

Under its executive stock option plan, M Corporation granted options on January 1, 2018, that permit...

Under its executive stock option plan, M Corporation granted options on January 1, 2018, that permit executives to purchase 15 million of the company's $1 par common shares within the next eight years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, $18 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures were...

Under its executive stock option plan, Q Corporation granted options on January 1, 2018, that permit...

Under its executive stock option plan, Q Corporation granted options on January 1, 2018, that permit executives to purchase 15 million of the company's $1 par common shares within the next eight years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, $18 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures were...

Question