Answer:
1. Determine the total compensation cost pertaining to the restricted stock.
2. Prepare the appropriate journal entries
December 31, Year 1:
Dr Stock compensation expense 105,000,000
Cr Additional paid in capital - restricted stock 105,000,000
December 31, Year 2:
Dr Stock compensation expense 105,000,000
Cr Additional paid in capital - restricted stock 105,000,000
December 31, Year 3:
Dr Stock compensation expense 105,000,000
Cr Additional paid in capital - restricted stock 105,000,000
December 31, Year 4:
Dr Stock compensation expense 105,000,000
Cr Additional paid in capital - restricted stock 105,000,000
January 1, Year 4, the stocks are handed out:
Dr Additional paid in capital - restricted stock 420,000,000
Cr Common stock 420,000,000
