Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock award plan, the company on January 1, 2016, granted 13 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 $18.00 per share on the grant date.

Required:

1.	Determine the total compensation cost pertaining to the restricted shares. Total compensation cost ______ million

2. & 3.

Prepare the appropriate journal entries.

Jan 01,2016 - Record the award of restricted shares on January 1, 2016.

Dec 31,2016 - Record compensation expense on December 31, 2016.

4.	Suppose Magnetic-Optical expected a 10% forfeiture rate on the restricted shares prior to vesting. Determine the total compensation cost. Total compensation cost ______ million