NR Enterprises, Inc., an IFRS reporter, granted stock appreciation rights to its key employees on January 2, 2018. These SARs allow the employees t o receive cash at the end of the vesting period for the difference between the market price of the stock on the exercise date and the pre established price of $55. NR granted 200,000 of these SARs. Employees must complete a 3-year service (vesting) period in order to receive the cash. The fair value of the SARs on December 31, 2018, is $7 per SAR. The fair value on December 31, 2019, is $13 per SAR and the fair value on December 31, 2020, is $11 per SAR. The company estimates that there will not be any forfeitures of the rights. 

Required

a. How much compensation expense, if any, should NR recognize in 2018, 2019, and 2020?

b. What is the journal entry to record this compensation expense?