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Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive...

Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2018, the company issued 480,000 executive stock options permitting executives to buy 480,000 shares of Pastner stock for $33 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2018 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they vest and measures the compensation cost for each vesting date as a separate award. The fair value of each tranche is estimated at January 1, 2018, as follows:
Vesting Amount Fair Value
Date Vesting per Option
Dec. 31, 2018 25% $5.50
Dec. 31, 2019 25% $6
Dec. 31, 2020 25% $6.60
Dec. 31, 2021 25% $7
Required:
1. Determine the compensation expense related to the options to be recorded each year 2018–2021, 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 2018–2021, assuming Pastner uses the straight-line method to allocate the total compensation cost.

Determine the compensation expense related to the options to be recorded each year 2018–2021, assuming Pastner allocates the compensation cost for each of the four groups (tranches) separately. (Enter your answers in thousands.)
Shares Compensation Expense in:
Vesting at: 2018 2019 2020 2021 Total
Dec. 31, 2018
Dec. 31, 2019
Dec. 31, 2020
Dec. 31, 2021
Total
2. Determine the compensation expense related to the options to be recorded each year 2018–2021, assuming Pastner uses the straight-line method to allocate the total compensation cost. (Enter your answers in whole dollars.)
2018 2017 2020 2021 total
Compensation Expense
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