On January 1 2017 Pharoah Corporation granted 2200 shares of

On January 1, 2017, Pharoah Corporation granted 2,200 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 Pharoah\'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 O for the amounts) Date Account Titles and Explanation Debit Credit

Solution

Date Account Titles and Explanation Debit Credit 1/1/12 Unearned Compensation 145200 Paid-in Capital in Excess of Par 134200 Common stock 11000 12/31/17 Compensation Expense 72600 Unearned Compensation 72600 12/31/18 Compensation Expense 72600 Unearned Compensation 72600 Account Titles and Explanation Debit Credit Cash 2020000 Discount on Bonds Payable (2000000- 1935093) 64907 Bonds Payable 2000000 Paid-in Capital—Stock Warrants 84907 Fair value of bonds (2,000 X $1,000 X .98) $1,960,000 Fair value of warrants (2,000 X $43) 86000 Aggregate fair value 2046000 Allocated to bonds [($1,960/$2,046) X $2,020,000] 1935093 Allocated to warrants [($86/$2,046) X $2,020,000] 84907