Android app - free vs. paid

[Richard Miller]

I have an Android app I've been selling only from my website. It works 
as a free version until the user enters an email address matched to a 
paid-for entry in a database (meaning, they can pay for the full version 
from my site, when then upgrades the status of their email address in a 
central database). I'd like to submit this app to Google Play.

I realize Google Play won't accept this upgrade method. This leaves me 
two choices:

1. Create and submit to Google separate Free and Premium versions of the 
app.
2. Use an in-app purchase system (i.e. freemium model).

I've already designed and tested the in-app purchase upgrade code in my 
(now selling) IOS app. Is the code used for that identical to what I 
would use in the Android version? It's a simple non-consumable upgrade.

How do people suggest I proceed? Option 1 or 2?

Thanks.
Richard Miller