Question:

On 1 July 2023, Rottnest Ltd awarded 500 shares each to 200 employees subject to the following non-market vesting conditions:

The shares will vest if:

at 30 June 2024 Rottnest Ltd's earnings have increased by more than 14 per cent

at 30 June 2025, Rottnest Ltd's earnings have increased by an average of 12 per cent or more over the two-year period

at 30 June 2026, earnings have increased by an average of 9 per cent over the threeyear period.

The shares had a fair value of $14.00 at 1 July 2023, which equals the share price at grant date. No dividends are expected to be paid over the three-year period.

During the year ending 30 June 2024, 30 employees leave the organisation. On the basis of prior experience, Rottnest Ltd believes that a further 20 employees will leave during the vesting period. At 30 June 2024 earnings have increased by 13 per cent. It is expected that earnings will continue at a similar rate of increase for 2025. Rottnest Ltd therefore expects the shares to vest on 30 June 2025.

By 30 June 2025, 30 employees have resigned during the year. Rottnest Ltd expects a further 25 employees to leave by the end of the vesting period. During the year ended 30 June 2025 earnings increase by 10 per cent. Rottnest Ltd expects that during the year ending 30 June 2026 earnings will increase by at least 9 per cent, meaning that earnings will have increased by more than the average of 9 per cent over the three-year period.

At 30 June 2026, 35 employees have left during the year, and Rottnest Ltd's earnings have increased by 9 per cent during the year.

REQUIRED: Prepare the accounting journal entries for the years ending 30 June 2024, 2025 and 2026.