Caesar Company acquired Illusions Inc three years ago and th

Caesar Company acquired Illusions, Inc. three years ago, and the purchase included $75,000 of goodwill. Illusion\'s goodwill now has a fair value of $60,000 minus how would Caesar account for this difference?

A. A journal entry will be made minus debiting Loss on Impairment of Goodwill for $15,000 and crediting Goodwill for $15,000.

B. The difference will be written off using an allowance account.

C. Goodwill is amortized minus usually on a straight line basis, so the annual amortization will be adjusted.

D. The account Goodwill will be debited for $15,000 and Loss on Goodwill will be credited for $15,000.

Solution

Ans Ans A