2 is Record the award of restricted shares on January 1, 2018.

3 is Record compensation expense on December 31, 2018.

Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock unit plan, the company on January 1, 2018, granted restricted stock units (RSUS) representing 14 million of its $1 par common shares to various division managers. The shares are subject to forfeiture if employment is terminated within three years. The common shares have a market price of $12.00 per share on the grant date. Management's policy is to estimate forfeitures. Required: 1. Determine the total compensation cost pertaining to the RSUS. 2. & 3. Prepare the appropriate journal entries. 4. Suppose Magnetic-Optical expected a 10% forfeiture rate on the RSUs prior to vesting. Determine the total compensation cost