On January 1, 20X1, Clarkston Company initiated an employee stock-based compensation plan that grants employees options to purchase 80,000 shares of $0.01 par value common stock at $4.00 per share. The employees' rights to the stock options vest over a two-year service period, from January 1, 20X1 to January 1, 20X3. Clarkston estimates that these OPTIONS have a fair value of $1.00 per share on the date of grant of January 1, 20X1. The stock options are exercisable any time between January 1, 20X3 and December 31, 20X3. Which ONE of the following should be included in the journal entry necessary on Clarkston's books on December 31, 20X1, the end of the FIRST year of the stock-based compensation plan? CREDIT Stock Option Liability for $40,000 DEBIT Compensation Expense for $80,000 DEBIT Compensation Expense for $40,000 CREDIT Stock Option Liability for $80,000