Granite Enterprises Acquired a Patent from Southern Research Corporation on January

Multiple Choice

Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2018, 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 2018, assuming the straight-line method is used.

A) $380,000.
B) $400,000.
C) $760,000.
D) $800,000.