1. On December 31, 2019, Hirst Inc. granted 5,000 shares of restricted common stock ($1 par value) to its employees. The stock is subject to a three-year vesting period. If an employee leaves Hirst prior to full vesting, that employee forfeits the stock. Market prices of the stock were as follows:

   December 31, 2019: $27 per share December 31, 2020: $30 per share December 31, 2021: $33 per share

   December 31, 2020: $26 per share

   What is the journal entry Hirst should record at the grant date under the fair value method?

   	1.	DR Compensation expense 135,000 CR Common stock 5,000 CR APIC - common stock 130,000
   	2.	DR Unearned compensation 135,000 CR Common stock 5,000 CR APIC - common stock 130,000
   	3.	DR Compensation expense 5,000 CR Common stock 5,000
   	4.	DR Unearned compensation 135,000 CR Paid-in capital - restricted stock 135,000
   	5.	No journal entry is required at the grant date

2.

1. Refer to the information in question #1 above. How much compensation expense should Hirst recognize on its 2021 income statement related to the restricted stock that was originally granted in 2019?

   		$0
   		$45,000
   		$50,000
   		$55,000
   		$60,000