On January 1 of Year 1, JayBug Company established a stock option plan for its senior employees. A total of 200,000 options were granted that permit employees to purchase 200,000 shares of stock at $20 per share. Each option had a fair value of $6 on the grant date. The market price for JayBug stock on January 1 of Year 1 was $20. The employees are required to remain with JayBug for two years (Years 1 and 2) to exercise these options, JayBug's income for Year 1, before including any consideration of compensation expense, is $150,000. Compute JayBug Company's NET INCOME for Year 1. Ignore income taxes. Net loss of $850,000 Net loss of $450,000 Net loss of $50,000 O Net loss of $650,000 Net loss of $250,000