To encourage employee ownership of the company's common shares, KL Corp. permits any of its employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchased at a 15% discount. During May, employees purchased 15,000 shares at a time when the market price of the shares on the New York Stock Exchange was $9 per share. KL will record compensation expense associated with the May purchases of:

• $0.

• $20,950.

• $20,250.

• $135,000.

Lance Chips granted restricted stock units (RSUs) representing 54 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $8 per share on the grant date. The total compensation cost pertaining to the restricted stock units is:

Multiple Choice

• $8 million.

• $54 million.

• $108 million.

• $432 million.

On October 1, 2021, Iona Ford Co. issued stock options for 300,000 shares to a division manager. The options have an estimated fair value of $3 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 6% in three years. Ford initially estimates that it is probable the goal will be achieved. After one year, Ford estimates that it is not probable that divisional revenue will increase by 5% in three years. In 2022, Ford will:

Multiple Choice

• reverse the amount expensed in 2021.

• record one-half of the new estimated total compensation.

• take no action.

• continue to record the original estimated compensation.