A Stock Compensation Journal Entry is a financial document that records the value of employee shares issued out of a company’s capital stock. This entry reflects the issuance of employee-owned shares of a company’s stock as part of a compensation package, or to liquidate or enable an exit strategy. It typically includes information such as the number of shares issued, the issue price per share, and any associated revenues or expenses. The Stock Compensation Journal Entry is the official record of the transaction and must be updated each time additional shares are issued or existing shares are sold. As an essential accounting document, it helps keep track of the ownership composition of a business and how its equity is allocated.