Recording Entries for Restricted Stock Unit Plan and Forfeitures as Incurred

On December $31$ of Year $1,$ Twix Inc. approved a restricted stock unit plan that included the following general terms.

$$ Each restricted stock unit is equivalent to one share of $$1$ par value, common stock of Twix Inc.

$$ Restricted stock units vest three years after the date of grant, subject to forfeiture if employment is

terminated prior to the end of the vesting period.

$$ Shares are distributed after the vesting period if the employee is still employed by the company.

On December $31$ of Year $1,26,400$ restricted stock units were granted to key employees under this plan when the market price of the common stock was $$25$ per share. The company estimates that $15\%$ of the restricted stock units will be forfeited and the company$$s policy is to record forfeitures as incurred.

Required

a$.$ Compute the total amount of compensation cost for the restricted stock unit plan.

b$.$ Prepare the journal entry on the date of grant, December $31$ of Year $1.$

c$.$ Prepare the journal entry on December $31$ of Year $2.$

d$.$ Prepare the journal entry on December $31$ of Year $3.$ In Year $3,1,760$ shares are forfeited.

e$.$ Prepare the journal entries on December $31$ of Year $4$ to record $(1)$ compensation expense and $(2)$ distribution

of shares, assuming an additional $352$ shares are forfeited in Year $4.$

Note: If a journal entry isn't required on any of the dates shown, select $"$N$/$A$$debit$"$ and $"$N$/$A$$credit$"$ as the account names and leave the Dr$.$ and Cr$.$ answers blank $($zero$).$

Note: Round your answers to the nearest whole dollar.

a$.$ Total amount of compensation cost $Answer

$660000\backslash$table$[[$Date$,$Account Name,Dr$.,$Cr$.,],[$b$.$ Dec. $31,$ Year $1,$N$/$A$-$debit,$0,0,],[$N$/$A$-$credit,$0,0,],[$To record compensation cost.,,,$],[$c$.$ Dec. $31,$ Year $2,$Compensation Expense,$220,000,0,],[$Paid$-$in Capital$$Restricted Stock,$0,220,000,],[$To record adjusting entry.,,,$],[$d$.$ Dec. $31,$ Year $3,$Compensation Expense,$190,666,0,],[$Paid$-$in Capital$-$Restricted Stock,$0,190,666,],[$To record adjusting entry.,,,$],[$e$.$ Dec. $31,$ Year $4,$v$,0,0,$x$],[$v$,0,0,$x$],[$To record adjusting entrys,,,$],[$Dec$.31,$ Year $4,,0,0,$x$],[,0,0,$x$],[$v$,0,0,$x$],[,,,],[$Check$,\backslash$table$[[$Cash$],[$Liability$\_$Employee Stock Purchase Plan$],[$Preferred Stock$],[$Common Stock$],[$Paid$-$in Capital in Excess of Par$-$Common Stock$],[$Paid$-$in Canital$\_$Restricted Stock$]],,,],[$Partially correct,$\backslash$table$[[$Paid$-$in Capital$$Restricted Stock$],[$Paid$-$in Capital$-$Stock Options$]],,,],[$Marks for this subm,$\backslash$table$[[$Paid$-$in Capital$-$Expired Stock Options$],[$Unearned Compensation$-$Equity$]],,,],[,\backslash$table$[[$Compensation Expense$],[$N$/$A$-$debit$]],,,],[($ Previous,N$/$A$-$credit,,,Next o$.]]$