Magnetic-Optical Corporation offers a variety of share-based compensation plans

Magnetic-Optical
Corporation offers a variety of share-based compensation plans to
employees. Under its restricted stock award plan the company on January
1 2011 granted 4 million of its $1 par common shares to various
division managers. The shares are subject to forfeiture if employment is
terminated within three years. The common shares have a market price of
$22.50 per share on the grant date.Required:1. Determine the total compensation cost pertaining to the restricted shares.2. Prepare the appropriate journal entry to record the award of restricted shares on January 1 2011.3. Prepare the appropriate journal entry to record compensation expense on December 31 2011.4.
Suppose Magnetic-Optical expected a 10% forfeiture rate on the
restricted shares prior to vesting. Determine the total compensation
cost.