On January 1,2011,Ace Electronics Purchased a Patent for $2,000,000 Cash,which

Multiple Choice

On January 1,2011,Ace Electronics purchased a patent for $2,000,000 cash,which allows Ace the exclusive legal right to manufacture a new microchip for the next 20 years.However,Ace thinks that the useful life of the patent is only 5 years because rapid changes in technology will make the microchip obsolete.For 2011,Ace should report ________.

A) depreciation expense of $100,000
B) amortization expense of $100,000
C) depreciation expense of $400,000
D) amortization expense of $400,000