Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2016, the company issued 440,000 executive stock options permitting executives to buy 440,000 shares of Pastner stock for $36 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2016 (graded vesting). Pastner elects to measure the fair value of all options on January 1, 2016, to be $4.80 per option (tranche) using a single weighted-average expected life of the options assumption.

Required:
1.	Determine the compensation expense related to the options to be recorded each year 20162019, assuming Pastner allocates the compensation cost for each of the four groups (tranches) separately.

2.	Determine the compensation expense related to the options to be recorded each year 20162019, assuming Pastner uses the straight-line method to allocate the total compensation cost.