Green Company is a calendar-year U.S. firm with operations in several countries. At January 1, 2021, the company had issued 40,400 executive stock options permitting executives to buy 40,400 shares of stock for $26. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows:

Vesting Date	Amount Vesting			Fair Value per Option
Dec. 31, 2021		20	%	$	8
Dec. 31, 2022		30	%	$	9
Dec. 31, 2023		50	%	$	13

Assuming Green uses the straight-line method, what is the compensation expense related to the options to be recorded in 2022?

Multiple Choice

• $145,440.

• $202,000.

• $350,106.

• $404,000.