On October 1, 2016, Farmer Fabrication issued stock options for 100,000 shares to a division manager. The options have an estimated fair value of $6 each. To provide additional incentive for...

On October 1, 2016, Farmer Fabrication issued stock options for 100,000 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 Farmer Fabrication’s stock price increases by 5% in three years. Farmer

initially estimates that it is not probable the goal will be achieved. How much compensation will be recorded in

each of the next three years?