Bostick Co. acquired the assets of Belk Co. for $1,200,000 in 2016. The estimated fair market value of the assets at the acquisition date was $1,000,000. Goodwill of $200,000 was recorded at acquisition. In 2017, because of negative publicity, one-half of the goodwill acquired from Belk Co. was judged to be permanently impaired.

Required

a. How will Bostick account for the impairment of the goodwill?

b. Prepare the journal entry to record the permanent impairment of goodwill.