Canada Bying a business entry

[KAYSER]

Hi Everyone

If a person bought an existing business is the following entry correct? if the owner paid cash and consider it as a loan to the business

Cr Loan from owner
Dr Capital asset
Dr Good will

also does Good will get amortized?

Thank you

 

[accounting nerd]

Goodwill is not amortized for book keeping purposes. Going forward, it is tested for impairment, usually on an annual basis. However, goodwill is amortized for tax purposes.