Knowledge Check 01 At January 1, Year 1, Edwards Company issued 10,000 stock options permitting employees to buy 10,000 shares of stock for $50 per share. The vesting schedule (graded-vesting) and value of the options that vest over the 3-year period is estimated at January 1, Year 1, as set forth in the following table. Vesting Date Amount Vesting Fair Value per Option Dec. 31, Year 1 10% $2 Dec. 31, Year 2 30% $3 Dec. 31, Year 3 60% $4 m A A What is the compensation cost for Year 1 relating to these stock options? (Do not use the straight-line method.) Answer is complete but not entirely correct. Compensation cost for Year 1 $ 2,000