easy Corp. provides a stock subscription plan to its employees as part of an Employee Stock Ownership Plan (ESOP). Fifty employees take advantage of the offer and subscribe to 100 shares each of $1 par Common Stock at $12 per share when the market price is $15 per share.
The employees will have a payroll deduction of $120 per month until the stock is paid for (10 months), then the stock will be issued to them.
- Record the following:
- The journal entry by Easy Corp at the date of the offer.
- A representative monthly entry
- The issuance of the stock
- Now assume Joe Schmo, an employee, leaves the company after he makes five payments.
- Make the entry assuming he gets his money returned.
- Make the entry assuming he was fired and forfeits his payments.
- Make the entry assuming Easy Corp issues stock equal to the amount purchased.
- Make the entry assuming Easy Corp resells the stock for him at $12 per share. It cost Easy Corp $25 in transfer costs,
It’s that simple.Pay only when you are satisfied.
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