Peoples Corporation purchased a building on December 29, 2012 that cost $1,000,000 and occupied it on January 2, 2013. The owner estimated that the building would last 40 years with a salvage value of $100,000 using straight-line depreciation. In early 2016, Mr. Peoples learned that due to a permanent highway closure, the company needs to relocate at the end of 2018. He believes that the salvage value at that time will be $700,000. Compute the amount of depreciation to record during 2016, and each of the two years thereafter.

A.

$77,500

B.

$52,500

C.

$100,000

D.

$22,500