On January 1, 20x4, a Big and Small Co. initiated a Share Appreciation Plan for its

employees. The vesting period ended on December 31, 20x5. A total of 16,000 SARs

were issued. At December 31, 20x4, the company estimated that 12,000 SARs would

vest. At December 31, 20x5, the actual number of SARs that vested were 12,500. A total

4,000 SARs were also exercised on December 31, 20x5. The cash payment was debited

to Administrative expenses. The SAR liability at December 31, 20x4 was properly

calculated and is included in Accounts payable and accrued liabilities. The fair value and

intrinsic value of the SARs is as follows:

Date / Fair Value / Intrinsic Value

Dec 31,20x4 / $11 / -

Dec 31,20x5 / 14 / $11.50

Required Prepare the journal entry/entries to record compensation expense at December

31, 20x5.