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On January 1, 2020, Blue Corporation adopted a stock option plan. On July 1, 2020,...

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Finance

On January 1, 2020, Blue Corporation adopted a stock option plan. On July 1, 2020, Blue granted key executives 130,000 stock options with a strike price of $34 per share. Market prices of the stock at various dates were as follows:

January 1, 2020 $47 per share
July 1, 2020 $49 per share
December 31, 2020 $50 per share
December 31, 2021 $53 per share
December 31, 2022 $57 per share

Using the Black-Scholes option pricing model, the value of the stock options on the grant date was $1,800,000. The options are exercisable beginning January 1, 2022. What amount of compensation expense should Blue recognize as a result of this plan for the year ended December 31, 2020?

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