Water company purchased a bottling machine on January 1, 2005 for $250,000. The estimated useful life is 25 years and they are using straight-line amortization. During 2007, they spent $46,000 on the machine to double its capacity and $5,000 on routine cleaning. What should the amortization expense be for 2007?
$30,000
12,000
$12,200
$10,000
The answer is 12,000 but I do not get how it is. Please explain thank you