(Stock Appreciation Rights) Capulet Company establishes a stock appreciation rights program that entitles its new president Ben Davis to receive cash for the difference between the market price of the stock and a preestablished price of $30 (also market price) on December 31, 2004, on 30,000 SARs. The date of grant is December 31, 2004, and the required employment (service) period is 4 years. President Davis exercises all of the SARs in 2010. The fair value of the SARs is estimated to be $6 per SAR on December 31, 2005; $9 on December 31, 2006; $15 on December 31, 2007; $6 on December 31, 2008; and $18 on December 31, 2009.

Instructions Prepare a 5-year (2005-2009) schedule of compensation expense pertaining to the 30,000 SARs granted president Davis.

Prepare the journal entry for compensation expense in 2005, 2008, and 2009 relative to the 30,000 SARs.