Meredith Company and Kyle Company were combined in a purchase transaction. Meredith was able to acquire Kyle at a bargain price. The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Meredith. After reducing noncurrent assets to zero, there was still some “negative goodwill.” Proper accounting treatment by Meredith is to report the amount as LO2

(a) An extraordinary item.

(b) Part of current income in the year of combination.

(c) A deferred credit.

(d) Paid in capital.