es e Compensatory Stock Options: Example (1 of 2) , Jan 1, 2021: Grant date; options to 5 executives to purchase 2,000 of the company's shares at exercise price of $60; Dec 31, 2022: vesting date; fair value: $220,000; first exercise date-2 years from the grant date. January 1, 2021: no journal entry because the service period has not started. December 31, 2021: Recognize the expense in the period in which the employee provides the service ($220,000/2 years) n Compensation Expense Contributed Surplus -- Stock Options 110,000 110,000 December 31, 2022: Recognize the expense in the period in which the employee provides the service ($220,000/2 years) Compensation Expense. Contributed Surplus -- Stock Options 110,000 110,000