1 Dividends on term preferred shares, where the shares have been recorded as a liability, should be debited to

A other comprehensive income.

B contributed surplus.

C retained earnings.

D interest expense.

2 On January 1, 2020, Orion Corp. granted an employee an option to purchase 5,000 of Orion's no par value common shares at $50 per share. The Black-Scholes option pricing model determined total compensation expense to be $220,000. The option became exercisable on December 31, 2021, after the employee completed two years of service. The market prices of Orion's shares were as follows:

January 1, 2020		$40
December 31, 2021		$52

For calendar 2021, Orion should recognize compensation expense of

A$110,000.

B $0.

C $50,000.

D $250,000.