Four Years Ago, Acnex Inc

Four years ago, Acnex Inc. granted Ms. Cardena an incentive stock option (ISO) to purchase 1,000 shares of Acnex stock at $44 per share. On date of grant, the market price was $42 per share. This year, Ms. Cardena exercised the option when the market price was $75 per share. Which of the following statements is true?

A) Ms. Cardena recognizes $31,000 ordinary income, and Acnex is allowed a $31,000 deduction this year.
B) Ms. Cardena recognizes $31,000 ordinary income, but Acnex is allowed no deduction this year.
C) Ms. Cardena recognizes no ordinary income, and Acnex is allowed no deduction this year.
D) Ms. Cardena recognizes no ordinary income, but Acnex is allowed a $31,000 deduction this year.