On January 1, year 3, Fay Corporation established an employee stock ownership plan (ESOP). Selected transactions relating to the ESOP during year 3 were as follows: On April 1, year 3, Fay contributed $30,000 cash and 3,000 shares of its $10 par common stock to the ESOP. On this date the market price of the stock was $18 a share. On October 1, year 3, the ESOP borrowed $100,000 from Union National Bank and acquired 5,000 shares of Fay's common stock in the open market at $17 a share. The note is for 1 year, bears interest at 10%, and is guaranteed by Fay. In its year 3 income statement, how much should Fay report as compensation expense relating to the ESOP? $184,000 $120,000