Universal Communications grants 10 million SARS to key executives at January 1, 2016. Upon exercise, the SARS entitle executives to receive cash or stock equal in value to the excess of the market price at exercise over the share price at the date of grant. The $1 par common shares have a current market price of $10 per share. The SARS vest at the end of 2019 (cannot be exercised until then) and expire at the end of 2018. The fair value of the SARS, estimated by an appropriate option pricing model, is $8 per SAR at January 1, 2016. The fair value re-estimated at December 31, 2016, 2017, 2018, 2019 and 2020, is $8.40, $8, $6, $4.30, and $5, 2020 respectively.

Required: Prepare SARS schedule using the % approach and determine the compensation expense for each year of service.