Assume that on January 1, 2017, Ogden Company issues 1,000 shares of restricted stock to its CEO, Christie DeGeorge. Ogden's stock has a fair value of $20 per share on January 1, 2017. Additional information is as follows.
1.The service period related to the restricted stock is five years.
2.Vesting occurs if DeGeorge stays with the company for a five-year period.
3.The par value of the stock is $1 per share.
Ogden makes the following entry on the grant date (January 1, 2017).
Unearned Compensation 20,000 Common Stock (1,000 × $1) 1,000 Paid-in Capital in Excess of Par-Common Stock (1,000 × $19)
19,000
At December 31, 2017, Ogden records compensation expense of
Compensation Expense 4000
Unearned Compensation 4000
How do you get 4000?