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On January 1, 2021, Farmer Fabrication issued stock options for 340,000 shares to a division...

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Accounting

On January 1, 2021, Farmer Fabrication issued stock options for 340,000 shares to a division manager. The options have an estimated fair value of $6 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Farmer initially estimates that it is probable the goal will be achieved. How much compensation will be recorded in 2021, 2022, 2023?

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