Your Company Pays $620,000 for a Patent That Has 10

Multiple Choice

Your company pays $620,000 for a patent that has 10 years remaining.After two years,the company sells the patent for $500,000.The company should report:

A) a debit to cash of $500,000 and a credit to patents of $500,000.
B) a debit to patents of $620,000,a credit to cash of $500,000,and a credit to accumulated amortization of $120,000.
C) a debit to cash of $500,000,a debit to accumulated amortization of $124,000,a credit to patents of $620,000,and a credit to gains of $4,000.
D) a debit to patents of $496,000,a debit to losses of $4,000,and a credit to cash of $500,000.