Citron Inc., a publicly accountable company, has an employee share option plan (ESOP) for several senior executives. The plan was granted on January 1, 2020, for a total of 20,000 options for one share each. The share options have an exercise price of $25 per share. The options have a vesting period of two years from the grant date, and 100% of the options have vested. Details of the share option plan are as follows:

• The fair value of the ESOP using an appropriate option-pricing model, such as Black-Scholes, is $300,000 on the grant date.
• On April 1, 2022, a total of 7,000 options were exercised. The market price of Citrons shares on this date was $31.
• On August 1, 2023, a total of 10,500 options were exercised. The market price of Citrons shares on this date was $33.
• On December 31, 2024, the remaining options were not exercised and expired. The market price of Citrons shares on this date was $34.

What amount should Citron record for common shares when the options are exercised on April 1, 2022?

Question 16 options:

a)

$105,000

b)

$175,000

c)

$217,000

d)

$280,000