Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2016, options were granted for sixty-nine thousand $1 par common shares. The exercise price equals the $3 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2019, and expire December 31, 2020. Each option has a fair value of $1 based on an option pricing model.

Which is the correct entry to record compensation expense for the year 2016?

Compensation expense	23,000
Paid-in capital stock options		23,000

Compensation expense	23,000
Common stock		23,000

Compensation expense	13,800
Paid-in capital stock options		13,800

Compensation expense	92,000
Paid-in capital stock options		92,000