Restricted stock : These are the share-based awards provided as compensation plans provided as incentives to the employees which include right to receive the shares and are restricted to employees’ extended tenure. The two variants of restricted stock are restricted stock awards, and restricted stock units. 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. (1) To journalize : The entry for compensation expense on December 31, 2017 and at December 31, 2018.

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Chapter 19, Problem 19.23E

(1)

To determine

Restricted stock: These are the share-based awards provided as compensation plans provided as incentives to the employees which include right to receive the shares and are restricted to employees’ extended tenure. The two variants of restricted stock are restricted stock awards, and restricted stock units.

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.

(1)

To journalize: The entry for compensation expense on December 31, 2017 and at December 31, 2018.

(2)

To determine

Earnings per share (EPS): The amount of earnings made available to each common share is referred to as earnings per share. Dilutive securities like convertible bonds, convertible preferred stock, and stock options, reduce the EPS by increasing the common shares.

Use the following formula to determine EPS:

Earnings per share} = Earnings available to common shareholdersWeighted average number of common shares outstanding= Net income –Preferred dividendsWeighted average number of common shares outstanding

To determine: The number of shares that causes net increase in denominator of EPS formula

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