On May 5,2011,Elton Corporation Granted Germaine an Option to Acquire $\begin{array}{ll}2012 & 2013\end{array}$

On May 5,2011,Elton Corporation granted Germaine an option to acquire 100 shares of the company's stock for $ 8 per share.The fair market price of the stock on the date of grant was $14.The stock requires that Germaine remain with the company for one year after the date of exercise.The option did not have a readily ascertainable fair market value.Germaine exercises the option on June 12,2012,when the fair market value of the stock is $18.On June 12,2013,the fair market value of the stock is $21 per share.How much must he report as income in 2012 and 2013?
$\begin{array}{ll}2012 & 2013\end{array}$
a. $\$ 1,000 \quad \$ 300$
b. $\$ 1,000 \quad \$-0-$
c. $\$ 400 \quad \$-0-$
d. $\$-0-\quad \$ 1,300$