Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2013, for $4 million. The patent will be used for 5 years, even though its legal life is 20 years. Rocky Corporation has made a commitment to purchase the patent from Granite for $200,000 at the end of five years. Compute Granite's patent amortization for 2013, assuming the straight-line method is used.
A)$380,000.
B)$400,000.
C)$760,000.
D)$800,000.

Question

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The Answer of Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2013, for $4 million. The patent will be used for 5 years, even though its legal life is 20 years. Rocky Corporation has made a commitment to purchase the patent from Granite for $200,000 at the end of five years. Compute Granite's patent amortization for 2013, assuming the straight-line method is used.
A)$380,000.
B)$400,000.
C)$760,000.
D)$800,000.

Granite Enterprises Acquired a Patent from Southern Research Corporation on January