Problem: VKI Corporation- Restricted stock award plan
On January 1, 2011, VKI Corporation awarded 12 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within three years. On the grant date, the shares have a market price of $2.50 per share.
Task:
• Determine the total compensation cost pertaining to the restricted shares.
• Prepare the appropriate journal entry to record the award of restricted shares on January 1, 2011.
• Prepare the appropriate journal entry to record compensation expense on December 31, 2011.
• Prepare the appropriate journal entry to record compensation expense on December 31, 2012.
• Prepare the appropriate journal entry to record compensation expense on December 31, 2013.
• Prepare the appropriate journal entry to record the lifting of restrictions on the shares at December 31, 2013.
The response must include a reference list. One-inch margins, double-space, Using Times New Roman 12 pnt font and APA style of writing and citations.