In order to encourage employee ownership of the company\'s $1 par common shares,

Question

In order to encourage employee ownership of the company's $1 par common shares, Washington Distribution permits any of its employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchased at a 10% discount. During March employees purchased 115,000 shares at a time when the market price of the shares on the New York Stock Exchange was $48 per share. Required Prepare the appropriate journal entry to record the March purchases of shares under the employee share purchase plan. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is not complete. No Event General Journal Debit Credit Cash Compensation expense Common stock Paid-in capital-excess of par

Explanation / Answer

1) Journal Entry Accounting titles & Explanations Debit Credit Cash (115,000*48*90%) 4,968,000 compensation expense (115000*48*10%) 552000 Common stock 115000*1) 115000 Paid in capital - excess of par 5,405,000

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