Employee share purchase plan : This is the plan offered by the company, which permits employees to buy the shares directly from the company, at discounted price. This plan is intended to encourage employee ownership in the shares of the company, and develop loyalty among the employee-shareholders. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. To journalize : The entry for purchase of shares under employee share purchase plan, in the books of W Distribution

Question

Want to see the full answer?

Answer 1

Question

Chapter 19, Problem 19.10E

To determine

Employee share purchase plan: This is the plan offered by the company, which permits employees to buy the shares directly from the company, at discounted price. This plan is intended to encourage employee ownership in the shares of the company, and develop loyalty among the employee-shareholders.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The entry for purchase of shares under employee share purchase plan, in the books of W Distribution

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

TB Problem 19-167 (Static) In order to encourage employee ownership... In order to encourage employee ownership of the company's $1 par common shares, KC Rakow Corporation permits any of its employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchased at a 15% discount. During June, employees purchased 150,000 shares at a time when the market price of the shares on the New York Stock Exchange was $10 per share. Required: Prepare the appropriate journal entry to record the June purchases of shares under the employee share purchase plan. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the June purchases of shares under the employee share purchase plan. Note: Enter debits before credits. Transaction 1 Record entr Cash Cash General Journal Common stock Compensation expense Income tax payable…

Exercise 19-11 (Static) Employee share purchase plan; Microsoft [LO19-3] Microsoft Corporation's disclosure notes for the year ending June 30, 2020, included the following regarding its $0.00000625 par common stock Employee Stock Purchase Plan-We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. Employees purchased the following shares during the periods presented: (Shares in millions) Year Ended June 30, Shares purchased Average price per share. 2020 9 2019 11 $142.22 2018 13 $104.85 $76.40 As of June 30, 2020, 96 million shares of our common stock were reserved for future issuance through the ESPP Required: Prepare the journal entry that summarizes Microsoft's employee share purchases for the year ending June 30,…

Knowledge Check 01 Darlington Incorporated, permits any of its employees to buy shares directly from the company. There are no brokerage fees and shares can be purchased at a 10% discount. During May, employees purchased 14,000 shares at a time when the market price of the shares was $10 per share. Prepare the appropriate journal entry for the May purchase. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.