On October 1, 2021, lona Frisbee Co. issued stock options for 430,000 shares to a division manager. The options have an estimated fair value of $3 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Frisbee initially estimates that it is probable the goal will be achieved. How much compensation will be recorded in each of the next three years?
A. $0
B. $143,333
C. $430,000
D. $1,290,000
Please let us know your comments regarding the correct answer to the question. Each of your comments will be evaluated by us and correct comments will be shared.