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What amount should Parker and Ryan recognize

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Question - On January 1, 2018, Parker and Ryan Insurance Company granted 30,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2020, and expire on January 1, 2024. Each option can be exercised to acquire one share of $1 par common stock for $12. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. The market price of the company's stock was as follows:

January 1, 2018 $14

December 31, 2018 $15

Required - What amount should Parker and Ryan recognize as compensation expense for 2018?

a. $10,000

b. $20,000

c. $30,000

d. $50,000

Reference no: EM132540285

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