On January 1, 2017, Orr Co. established a stock appreciation rights plan for its executives. The SAR 360,000 vests on December 31, 2020 and expires on January 1, 2022. At any time between the grant and expiration dates, executives may receive cash equal to the difference between the market price of the common shares and a preset price. of $10. The estimated fair value of each SAR is as follows: 12/31/17: $6; 12/31/18—$2; 12/31/19—$5; 12/31/20—$7. The underlying stock prices are: 12/31/17—$20; 12/31/18—$16; 12/31/19—$19; 12/31/20—$21; 12/31/21—$23. Executives exercise 60,000 SAR on 12/31/20 and the remainder on December 31, 2021.

Required:

Determine the amount of the compensation expense for each of the five years beginning in 2017. List any negative expenses for a given year in parentheses.

2017
2018
2019
2020
2021

Determine the balance sheet representation at the close of each of the five years.