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On January 1 , 2 0 2 0 , Crane Company granted Andy Allen, an employee, an option to buy 2 0 2 0 shares

On January 1,2020, Crane Company granted Andy Allen, an employee, an option to buy 2020 shares of Crane Co. stock for $25 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $21600. Allen exercised his option on September 1,2020, and sold his 2020 shares on December 1,2020. Quoted market prices of Crane Co. stock during. 2020 were
January 1,$25 per share
September 1,$30 per share
December 1 $34 per share
The service period is for three years beginning January 1,2020. As a result of the option granted to Allen, using the fair value method, Crane should recognize compensation expense for 2020 on its books in the amount of
$7200.
$4320.
$15000.
$21600.
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