A company issued its CEO 100000 shares of restricted stock t

A company issued its CEO 100,000 shares of restricted stock that are restricted for two years. The current share price is $10. Based on the information provided, which of the following statements is true?

A. An unearned compensation liability in the amount of $1 million is created at the grant date

B. An unearned compensation asset in the amount of $1 million is created at the grant date

C. Stockholders\' equity increases by $1 million at the grant date

D. An unearned compensation contra equity account in the amount of $500,000 is recognized at the grant date

E. Stockholders\' equity is unchanged at the grant date

Solution

Solution:

The true statement is \"Stockholders\' equity increases by $1 million at the grant date\"

Hence option C is correct.