On January 1, 20X6, Red Leaf Corp. granted 1,000 cash-settled SARs to its employees with a benchmark price of $30. As at December 31,20X6, management estimated that 100% of the SARs would vest. The company follows IFRS. The SARs vested on December 31, 20X7, and will expire on December 31, 20X9. In 20X7, 100 SARs were forfeited. Red Leafs year end is December 31. Pertinent details of the SARs are as follows:

Date Fair value of each SAR

January 1, 20X6 $3

December 31, 20X6 $4

December 31, 20X7 $6

What is the compensation expense recognized by Red Leaf for the year ended December 31, 20X7?

a.

$3,400

b.

$5,400

c.

$4,000

d.

$1,500