On 1 April 2013, EMU Publishing purchased the royalties for CS Lewis' next novel for the sum of $210,000.The novel,The Leopard, the Wizard and the Pantry, was published in June 2014.The royalty agreement has a term of 7 years, with no right of renewal.EMU expects the novel to sell consistently over the term of the royalty. How would you expect the royalty be reflected in EMU's income statement?

Select one:

a.The total cost of the royalty would have been expensed at the time it was signed.

b.Since the royalty is an asset, and the book is selling well, it will only be expensed at the end of the seven year term.

c.The total cost of the royalty would have been expensed at the time the book was published.

d.It would not affect the Income Statement.

e.Annual amortisation of $30,000 would be recorded as an expense.