Thompsons Inc. issues 2,000 shares of Restricted Stock to the CEO on January 1, 2021. The stock has a fair value of $132,000 on this date. The service period related to the stock is 3 years. Vesting occurs after 3 years from the date of issue. The stock has a par value of $10 per share. At december 31, 2021, the stock had a market value of $180,000.

At December 31, 2021 [After 1 year], the journal entry to record compensation expense would include a

A. credit to paid in capital - restricted stock $44,000

B. credit to unearned compensation $44,000

C. credit to compensation expense $60,000

D. debit to unearned compensation $44,000

E. debit to compensation expense $132,000

Part 2:

Assume at february 3, 2023 [during 3rd year of vesting], the CEO left Thompsons employment. The journal entry to account for the foreiture of this Restricted Stock issue would include a

A. debit to paid in capital - common stock $132,000

B. credit to compensation expense (or retained earnings) $88,000

C. credit to unearned compensation $132,000

D. Credit to paid in capital - common stock $112,000

E. debit to compensation expense $44,000