A Company Acquires a Patent for a Drug with a Remaining

Multiple Choice

A company acquires a patent for a drug with a remaining legal and useful life of six years on January 1, 2005 for $1,200,000.The company uses straight-line amortization for patents.On January 2, 2007, a new patent is received for a timed-release version of the same drug.The new patent has a legal and useful life of twenty years.The least amount of amortization that could be recorded in 2007 is

A) $200,000.
B) $40,000.
C) $54,545.
D) $60,000.