Question: Gregorys on Ormond, Inc. grants its president 2,000 stock options on January 1, Year 1 that give him rights to purchase shares of the company

Gregory’s on Ormond, Inc. grants its president 2,000 stock options on January 1, Year 1 that give him rights to purchase shares of the company for $ 40 per share on December 31, Year 2. At the time the options were granted, the fair value of the options totaled $ 20,000. At December 31, Year 1 the company’s stock sold for $ 45 per share and at December 31, Year 2 the selling price of the stock was $ 55 per share. In its Year 2 financial statements, Gregory’s on Ormond would recognize compensation expense relative to the options of:
a. ($ 10,000)
b. $ 0
c. $ 15,000
d. $ 10,000

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