On January 1, 2011, Evans Company Granted Tim Telfer, an Employee

On January 1, 2011, Evans Company granted Tim Telfer, an employee, an option to buy 1,000 ordinary shares of Evans Co.for $25 per share, the option exercisable for 5 years from date of grant.Using a fair value option pricing model, total compensation expense is determined to be $7,500.Telfer exercised his option on September 1, 2011, and sold his 1,000 shares on December 1, 2011.Quoted market prices of Evans Co.shares during 2011 were
The service period is for three years beginning January 1, 2011.As a result of the option granted to Telfer, using the fair value method, Evans should recognize compensation expense for 2011 on its books in the amount of

A) $9,000.
B) $7,500.
C) $2,500.
D) $1,500.