Answer:
See the explanation below.
Step-by-step explanation:
Total compensation expenses = 25 million * 15 = $375 million
1. On December 31, 2018.
Compensation expenses = $375 million / 3 = $125 million
Journal entries will be as follows:
Details Dr ($'Million) Cr ($'Million)
Compensation expenses 125
Paid-in Capital - Restricted stock 125
To record the compensation expenses for 2018.
2. On December 31, 2019.
Compensation expenses = [$375 million * 96% * (2/3)] - $125 million = $115 million
Journal entries will be as follows:
Details Dr ($'Million) Cr ($'Million)
Compensation expenses 115
Paid-in Capital - Restricted stock 115
To record the compensation expenses for 2019.
3. On December 31, 2020.
Compensation expenses = ($375 million * 96%) - $125 million - $115 million = $120 million
Journal entries will be as follows:
Details Dr ($'Million) Cr ($'Million)
Compensation expenses 120
Paid-in Capital - Restricted stock 120
To record the compensation expenses for 2020.