Accounting for goodwill
Sulley Equipment Manufacturing Co. purchased the assets of Malcom Inc., a competitor, in 2011. It recorded goodwill of $50,000 at purchase. Because of defective machinery Malcom had produced prior to the purchase, it has been determined that all of the purchased goodwill has been permanently impaired.
Required
Prepare the journal entry to record the permanent impairment of the goodwill.
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