Sunday, July 19, 2015

Pamela was an officer in Green Restaurant which subsequently went bankrupt. Pamelastarted a new restaurant and to establish goodwill, paid off the debts of $100,000 of Green Restaurant. She was under no obligation to do so. The $100,000 is

Pamela was an officer in Green Restaurant which subsequently went bankrupt. Pamelastarted a new restaurant and to establish goodwill, paid off the debts of $100,000 of Green Restaurant. She was under no obligation to do so. The $100,000 is:

Answer:  capitalized now because the expenses are not ordinary. No future amortization is permitted.