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    sconner's Avatar
    sconner Posts: 2, Reputation: 1
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    #1

    Feb 13, 2011, 10:45 AM
    Goodwill and amortization
    Goodwill in amount of $27,000,000 purchased. Is there amortization and/or journal entry?
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Feb 13, 2011, 01:56 PM

    You only record Goodwill if you purchase a company for more than the company is worth.
    From your example you will have the following journal entry:
    Debit Goodwill for the amount
    Credit Cash for the amount

    There is no amortization with Goodwill, however you have to do an impairment test annually to determine if your Goodwill has been impaired.
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