Question

Refer to the data for Barwood Corporation in BE16-6. Repeat the requirements assuming that instead of options, Barwood granted 2,000 shares of restricted stock.

Short answer

Unearned revenue will be debited by $130,000, common stock will be credited by $10,000, and Paid-in Capital in Excess of Par— Common Stock under the credit of $120,000. Compensation expense will be $65,000 debit for 2017 and 2018, and unearned compensation is $65,000 credit for 2017 and 2018.

Step-by-step solution

The given information is as follows:

Restricted stock 2000 shares

Journal entry

Date	Description	DEBIT	CREDIT
1/1/17	Unearned Compensation	$130,000
	Common Stock (2,000 X $5)		$10,000
	Paid in Capital in Excess of Par— Common Stock		$120,000
	Being unearned compensation at par
12/31/17	Compensation Expense	$65,000
	Unearned Compensation		$65,000
	Being compensation expense incurred
12/31/18	Compensation Expense	$65,000
	Unearned Compensation		$65,000
	Being compensation expense incurred