1. Earth Ltd grants 80 share options to each of its 200 employees. Each grant is conditional on the employee working for the company for 3 years following the grant date. On grant date, the fair value of each share option is estimated to be $12. Based on a weighted average probability, the company estimates that 20% of its employees will leave during the 3-year vesting period.

During year 1, 15 employees left, and the company revises its estimate of total employee departures over the full 3-year period from 20% to 22%.

During year 2, seven employees left, and the company revises its estimate of total employee departures over the full 3-year period from 22% to 15%. During year 3, a further four employees left.

Required:

a. Prepare a schedule setting out the annual and cumulative remuneration expense for years 1-3

b. Give the journal entry in year 1.