On January 1, Year 1, East Company purchased $60,000 of goodwill. On December 31, Year 4 East determined that the goodwill suffered a $25,000 permanent impairment. However, on December 31, Year 6 East estimated that it had recovered $5,000 of the impairment that had previously been considered to be a permanent impairment. Which of the following journal entries was required to recognize the impairment?

 

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Account Titles Loss on Impairment Goodwill Goodwill Account Titles Loss on Impairment Goodwill Account Titles Loss on Impairment Account Titles Goodwill Gain on Impairment Recovery Debit Credit 25,000 Debit 20,000 Debit 25,000 5,000 Credit Debit Credit 25,000 20,000 25,000 Credit 5,000 Account Titles Loss on Impairment Goodwill Goodwill Account Titles Loss on Impairment Goodwill Account Titles Loss on Impairment Account Titles Goodwill Gain on Impairment Recovery Debit Credit 25,000 Debit 20,000 Debit 25,000 5,000 Credit Debit Credit 25,000 20,000 25,000 Credit 5,000

Answer rating: 100% (QA)

ANSWER OPTION Account titles Loss on impairment Goo... View the full answer