Able Corp. acquires Bailey Company in a transaction that is properly accounted for as a business acquisition. The acquisition contract and Bailey’s share-based compensation agreement require Able stock to be exchanged for Bailey common stock issued to Bailey’s employees as share-based payments. No further service is required by the employees of Bailey to qualify for the replacement awards. How should Able account for the shares of stock issued as replacement awards to employees of Bailey?

a. As a cost of acquisition.

b. As an expense in the current period.

c. As a loss in the current period.

d. As an extraordinary loss in the period.