On January 1, 2015, Western Wear, Inc. granted 100,000 stock options to its employees. 30% of these options will vest on December 31, 2015, 30% will vest on December 31, 2016, and the remaining 40% will vest on December 31, 2017. The fair value of the options was $15.34 per share using a weighted-average expected life. The fair value of the 30,000 shares that vest in 2015 is $14.67 per share. The fair value of the 30,000 shares that vest in 2016 is $15.38 per share and the fair value of the remaining options is $16.30 per share. Western does not expect any forfeitures.

Prepare a memo to the file addressing Western Wear's compensation expense for 2015 through 2017. Use the Codification for support.

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