Refer to Practice 13-8. Assume that the stock-based compensation plan involves stock appreciation rights. At the end of three years, the employees are given a cash award equal to the excess of the fair value at that time of 100,000 shares of stock above the threshold price of $30. The stock price is $40 at the end of the first year and $36 at the end of the second year. The service period is three years. Make the journal entries necessary at the end of the first year and the second year to recognize the compensation expense associated with these stock appreciation rights.
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