E 19-4 Restricted stock award plan; forfeitures anticipated,Magnetic-Optical Corporation offers a variety of share-basedcompensation plans to employees. Under its restricted stock award plan, thecompany on January 1, 2011, granted 4 million of its $1 par common shares tovarious division managers.,The sharesare subject to forfeiture if employment is terminated within three years.,The common shares have a market price of22.50 per share on the grant date.,Restricted:,1. Determine the total compensation cost pertaining to therestricted shares.,2. Prepare the appropriate journal entry to record the awardof restricted shares of January 1, 2011.,3. Prepare the appropriate journal entry to recordcompensation expense on December 31, 2011.,4. Suppose Magnetic-Optical expected a 10% forfeiture rateon the restricted shares prior to vesting.,Determine the total compensation cost.