Togo Incorporation started a share appreciation plan on January 1, 2018, when it granted 50,000 rights to its executives. The vesting period is 2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2020. The fair value of Togo's SARs for the years ended December 31, 2018 and 2019, are as follows:
Date                                                    Fair Value
December 31, 2018 .........................    $6        
December 31, 2019 .........................    $7
All rights are exercised on January 1, 2020, when their fair value is $7 and the market price of the stock is $35 per share. What is the compensation expense in 2018 and in 2019? Prepare the journal entries to record the SAR plan.