Use the Following Information for Questions

Use the following information for questions.
Lee Company received an HK$1,800,000 subsidy from the government to purchase manufacturing equipment on January, 2, 2011.The equipment has a cost of HK$3,000,000, a useful life a six years, and no salvage value.Lee depreciates the equipment on a straight-line basis.
-If Lee chooses to account for the grant as an adjustment to the asset, the book value of the asset on the 2012 statement of financial position will be:

A) HK$800,000.
B) HK$1,200,000.
C) HK$2,800,000.
D) $HK2,400,000.