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Question - On January 1, 2015, Byword Company signed an eight year lease for office space. The entity has the option to renew the lease for an additional four year period on or before January 1, 2022.
During January 2017, two years after occupying the leased premises, the entity made general improvement to the premises costing 3,600,000 and having an estimated useful life of ten years.
On December 31, 2017, the entity's intention as to exercise of the renewal option is uncertain because this will depend upon future office space for requirement. A full year depreciation expense is taken for the current year.
Required - What amount should be recorded as depreciation of leasehold improvement for the current year?
A. 300,000
B. 360,000
C. 450,000
D. 600,000
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