Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2021, options were granted for 84,000 $1 par common shares. The exercise price equals the $4 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. 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 2021?

Multiple Choice

Compensation expense	16,800
Paid-in capitalstock options		16,800

Compensation expense	28,000
Common stock		28,000

Compensation expense	28,000
Paid-in capitalstock options		28,000

Compensation expense	112,000
Paid-in capitalstock options		112,000