On December 31, 2018, in Order to Retain Certain Key

Multiple Choice

On December 31, 2018, in order to retain certain key executives, Entebbe Corporation granted them stock options. 25,000 options were granted at an option price of $ 40 per share. Market prices of the shares were as follows: December 31, 2019 $ 35 per share
December 31, 2020 $ 39 per share
The options were granted as compensation for services to be rendered over a two-year period beginning January 1, 2019. The Black-Scholes option pricing model determined total compensation expense to be $ 500,000. The amount of compensation expense Entebbe should have recorded for calendar 2020 is

A) $ 250,000.
B) $ 500,000.
C) $ 875,000.
D) $ 1,000,000.