Dangote acquired Dantata’s business for N350,000. The total asset work were N820,000 and liabilities amounted to N 640,000
The double entry to record the goodwill in the books is debt
Purchase of business account and credit cash account
Goodwill account and credit purchase of business account
Cash account and credit goodwill account
Goodwill account and credit cash account
Correct answer is B
when there is excess of purchase consideration over net assets, the accounting entries is to debit goodwill account as the receiving account and credit purchase of business account as the giving account.