Detailed Answer
(c) The amount contributed or committed to be
contributed to an employee stock ownership plan (ESOP) in a
given year should be the measure of the amount to be charged to
expense by the employer. Therefore, Fay should record year 1
compensation expense of $84,000 [contribution of $30,000 cash
and common stock with a FV of $54,000 (3,000 × $18)].