Final answer:
The annual amortization expense for the patent is $7,500 and it is indeed recorded as an operating expense on the income statement. This practice is consistent with GAAP for accounting for the consumption of intangible asset benefits over their useful lives.
Step-by-step explanation:
The statement that the annual amortization expense for the patent is $7,500 and it would be recorded as an operating expense on the income statement is True. Amortization is the process of gradually writing off the initial cost of an intangible asset over its useful life. In this case, the patent is an intangible asset, and its cost is being expensed annually in the form of amortization expense.
This expense is considered an operating expense because it arises from the core operations of the business, which involves the utilization of the patent. The amortization of a patent reflects the consumption of the economic benefits of the patent over its useful life and is recognized as an expense in accordance with generally accepted accounting principles (GAAP).