On January 1, 2021, Tru Fashions Corporation awarded restricted stock units (RSUs) representing 5 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 $9.00 per share. Required: 1. Determine the total compensation cost pertaining to the RSUs. 2. Prepare the appropriate journal entry to record the award of RSUs on January 1, 2021. 3. Prepare the appropriate journal entry to record compensation expense on December 31, 2021. 4. Prepare the appropriate journal entry to record compensation expense on December 31, 2022. 5. Prepare the appropriate journal entry to record compensation expense on December 31, 2023. 6. Prepare the appropriate journal entry to record the lifting of restrictions on the RSUs and issuing shares at December 31, 2023.

Check the explanation

Explanation:

Journal entries (figures in million)

s.no             Particulars                                          Debit     Credit

2            No entry on grant date  

3         Compensation expenses (45/3)                  15  

            paid in capital-restricted stock                                  15

4          Compensation expenses                            15  

            paid in capital-restricted stock                                   15

5          Compensation expenses                           15  

            paid in capital-restricted stock                                    15

6        paid in capital-restricted stock                    45  

            common stock                                                                5

            paid in capital -excess of par                                       40

anjan should should report alteast 5000 on the first apyment and 10,000 each year

explanation:

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