On January 1, 2017, Bridgeport Corporation granted 2,000 shares of restricted $5
ID: 2550617 • Letter: O
Question
On January 1, 2017, Bridgeport Corporation granted 2,000 shares of restricted $5 par value common stock to executives. The market price (fair value) of the stock is $66 per share on the date of grant. The period of benefit is 2 years.
Prepare Bridgeport’s journal entries for January 1, 2017, and December 31, 2017 and 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
Date
Account Titles and Explanation
Debit
Credit
1/1/17, 12/31/17 or 12/31/18
1/1/17, 12/31/17 or 12/31/18
1/1/17, 12/31/17 or 12/31/18
Explanation / Answer
Solution: Following is the required journal entries:
Fair value at the grant date = 2000*66 = $132,000
Date Particulars Debit($) Credit($) 1/1/17 No Entry 12/31/17 Compensation Expense 66,000 Paid in capital - stock options(132000/2) 66,000 12/31/18 Compensation Expense 66,000 Paid in capital- stock options(132000-66000) 66,000