Blue Company Signs a 12-Year Franchise Agreement with Fast Taco

Blue Company signs a 12-year franchise agreement with Fast Taco.Fast Taco retained significant powers,rights,and a continuing interest.Blue (the franchisee) makes noncontingent payments of $15,000 per year for the first five years of the franchise.Blue Company also pays a contingent fee of 2% of gross sales every month.Which of the following statements is correct?

A) Blue Company may deduct the $15,000 per year noncontingent payments in full as they are made.
B) Blue Company may deduct the monthly contingent fee as it is paid.
C) Blue Company may deduct both the noncontingent annual fee and the contingent monthly fees as they are paid.
D) Blue Company may not deduct either the noncontingent annual fee or the contingent monthly fees as they are paid.
E) None of the above.