Fandango Co. Ltd. uses straight-line amortization. If the book value of a new piece of equipment is $36,000 and is expected to last five years with no salvage value, the monthly amortization expense will be

Question

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To calculate the monthly amortization expense using straight-line amortization, we divide the cost of the equipment ($36,000) by the number of months in its useful life (5 years x 12 months/year = 60 months).
$36,000 ÷ 60 = $600
Therefore, the monthly amortization expense is $600. The correct answer is B.