5.

As part of its stock-based compensation package, on January 1, 2018, International Electronics granted restricted stock units (RSUs) representing 50 million $1 par common shares. At exercise, holders of the RSUs are entitled to receive cash or stock equal in value to the market price of those shares at exercise. The RSUs cannot be exercised until the end of 2021 (vesting date) and expire at the end of 2023. The $1 par common shares have a market price of $6 per share on the grant date. The fair value at December 31, 2018, 2019, 2020, 2021, and 2022, is $8, $6, $8, $5, and $6, respectively. All recipients are expected to remain employed through the vesting date. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. Required:

1. to 3. Prepare the appropriate journal entries pertaining to the RSUs on January 1, 2018 and December 31, 2018December 31, 2021. The RSUs remain unexercised on December 31, 2022, prepare the appropriate entry. 4. The RSUs are exercised on June 6, 2023, when the share price is $6.50, and executives choose to receive cash. Prepare the appropriate journal entry(s) on that date.

Record the award of 50 million RSUs on January 1, 2018 when the market price of the stock is $6 per share. 2 Record any necessary journal entry on December 31, 2018 when the fair value of the RSUs is estimated at $8 per RSU Record any necessary journal entry on December 31, 2019 when the fair value of the RSUs is estimated at $6 per RSU 3 4 Record any necessary journal entry on December 31, 2020 when the fair value of the RSUs is estimated at $8 per RSU Record any necessary journal entry on December 31, 2021 when the fair value of the RSUs is estimated at $5 per RSU 5 6 Record any necessary journal entry on December 31, 2022 when the fair value of the RSUs is estimated at $6 per RSU and the RSUs remain unexercised. 1 Record any necessary adjustment to compensation expense 2 Record the payment of cash