On January 2, Year 1, Argy Companys board of directors granted 12,000 stock options to a select group of senior employees. The requisite service period is three years, with one-third of the options vesting at the end of each calendar year (graded vesting). An option-pricing model was used to calculate a fair value of $5 for each option on the grant date. The company assumes all 12,000 options will vest (i.e., there will be no forfeitures).

Required: Determine the amount to be recognized as compensation expense in Year 1, Year 2, and Year 3 under (a) IFRS and (b) U.S. GAAP. Prepare the necessary journal entries. (Please show Debits and Credits)