In order to encourage employee ownership of the companys $1 par common shares, Washington Distribution 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 9% discount. During March, employees purchased 30,000 shares at a time when the market price of the shares on the New York Stock Exchange was $14 per share. Required: Prepare the appropriate journal entry to record the March purchases of shares under the employee share purchase plan. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

In order to encourage employee ownership of the company's $1 par common shares, Washington Distribution 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 9% discount. During March, employees purchased 30,000 shares at a time when the market price of the shares on the New York Stock Exchange was $14 per share. Required: Prepare the appropriate journal entry to record the March purchases of shares under the employee share purchase plan. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) Answer is complete but not entirely correct. No Event Credit General Journal Cash Compensation expense Common stock Paid-in capital - excess of par Debit 38,220,000 37,800 30,000 390,000