12. On January 1, 2017, Korsak, Inc. established a stock appreciation rights plan for its executives. It entitled them to receive cash at any time during the next four years for the difference between the market price of its common stock and a pre-established price of $20 on 120,000 SARs. Current market prices of the stock are as follows:

January 1, 2017 $35 per share

December 31, 2017 38 per share

December 31, 2018 30 per share

December 31, 2019 33 per share

Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2017.

What amount of compensation expense should Korsak recognize for the year ended December 31, 2018?

a. $0

b. $60,000

c. $600,000

d. $300,000