Questlon $17(9$ points$)$

On January $1.$ Year $1.$ Lacrosse Corp granted Corky, its president, $10,000$ stock appreciation rights $($SARs$).$ Upon exercise, Corky may choose to receive cash for the excess of the market price of the stock on that date over the exercise price. The SARs vest at the end of three years and expire at the end of five years.

The fair vatue of the SARs, estimated by an appropriate option pricing model, were as follows:

January $1,$ Year I $\backslash (\backslash$$ $10\backslash )$

December $31,$ Year $1\backslash$$$15$

December $31,$ Year $\backslash (2\backslash$$ $10\backslash )$

December $31,$ Year $\backslash (3\backslash$$ $15\backslash )$

Corky exercised all of his SARs on June $30,$ Year $4$ when the fair value of the SARs was $\backslash$$$10.$

Required:

$1.$ What amount should Lacrosse recognize as compensation expense for Year $1?$

$2.$ What amount should Lacrosse recognize as compensation expense for Year $2?$

$3.$ What amount should Lacrosse recognize as compensation expense for Year $3?$