Daniel Inc. established a cash-settled stock appreciation compensation plan on January 1, 2017. On this date, the company issued 100 cash-settled share appreciation rights (SARs) to each of its 200 employees, giving employees the right to receive cash based on the increase in the company's share price over the period the shares are held. The benchmark price of the underlying shares was established at $25.00. The plan expires on December 31, 2025.

Date

SAR value

Sharemarket value

January 1, 2017

Not required

$25.00

December 31, 2017

$6.75

$27.50

The SARs vest after employees provide two years of service. In 2017, 20 employees left the company; it was estimated that 30 more would leave before the SAR is vested.

Which of the following is not correct for the journal entry on December 31, 2017?

(A)Total compensation expense to be recorded should be $ 101,250.

(B)Total estimated employees who will be vested for the SAR are 180.

(C)Only 50% of the SAR liability should be accounted for at the end of 2017

(D)Total number of SAR to be used for the calculation of the SAR liability is 150,000.

(E)Total SAR liability for 2017 should be $ 50,625.