Melba Company granted to its employees $5,000$ stock options on January $1,2019.$ Based on the

option pricing model used by the company, fair value of the option on this date is P$45.$ The options

become exercisable only if the employee remains employed until December $31,2021$ and the

company's stock price increase by $10$ percent during the three$-$year vesting period. In $2019,$ the

company expects to reach the said $10$ percent increase in the stock price by the end of December

$31,2021.$

By the end of $20195$ percent of the employees left and the company estimates that $90$ percent

will remain until the end of the vesting period. At the end of $2020$ the company expects that $95$

percent of the employees remain with the company throughout the vesting period.

In December $31,2021,$ the company's stock price increased by three percent and that only $90$

percent of the employees actually remained with the company for the three$-$year vesting period.

What is the compensation expense on December $31,2020?71,250$

What is the compensation expense on December $31,2021?57,000$