On January 1, 2016, Howard, Inc. granted to a key executive a fixed compensatory share option plan for 1,000 shares of $4 par common stock for $30 a share. The fair value per option on that date was $14. The service period extended through December 31, 2017. Refer to Exhibit 15-3. What entry, if any, was required on December 31, 2016?

no entry was necessary

Compensation Expense 7,000 Paid-in Capital Share Options 7,000

Compensation Expense 6,000 Paid-in Capital Share Options 6,000

Compensation Expense 9,000 Deferred Compensation 9,000