On February 12, Gleem Publishing, Inc., purchased the copyright to a book for $15,000 and agreed to pay royalties equal to 10% of book sales, with a guaranteed minimum royalty of $60,000. Gleem had book sales of $750,000 in year 1. In its year 1 income statement, what amount should Gleem report as royalty expense?

a. $60,000 b. $75,000 c. $76,500 d. $90,000