Question: Allied Paper Products, Inc. offers a restricted stock award plan to its vice presidents. On January 1, 2011, the company granted 16 million of its $1 par common shares, subject to forfeiture if employment is terminated within two years. The common shares have a market price of $5 per share on the grant date.
Required:
(1) Determine the total compensation cost pertaining to the restricted shares.
(2) Prepare the appropriate journal entries related to the restricted stock through December 31, 2012.