On January 1, 2018, M

Essay

On January 1, 2018, 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 2019, 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, 2018. Ignore taxes.
2. Prepare the appropriate journal entry to record compensation expense on December 31, 2019. Ignore taxes.