Orange Incorporated Issued 26,000 Nonqualified Stock Options Valued at $52,000

Orange Incorporated issued 26,000 nonqualified stock options valued at $52,000 (in total) . The options vest over two years-half in 2020 (the year of issue) and half in 2020. One thousand options are exercised in 2021 with a bargain element on each option of $6. What is the 2021 book-tax difference associated with the stock options?

A) $20,000 unfavorable.
B) $20,000 favorable.
C) $26,000 unfavorable.
D) $26,000 favorable.
E) None of the choices are correct.