Carbon Industries purchased Smog Corporation on January $1,2023.$ The purchase price was $$100$ million, payable $$50$ million in cash and a $$50$ million

note payable with interest due annually at $1\%$ and all principal due at the end of five years. Carbon concluded that the fair value of the note

payable was $$50$ million and that the $1\%$ interest rate was a fair market rate. Goodwill of $40$ million was recorded in the acquisition accounting

During the $2023$ audit, the auditors determined that a fair value for an interest rate on the note payable should have been $6\%.$

As a result of the related audit adjustment $,$ what would be the impact $($directional$)$ on goodwill at $12/31/23$ and on interest expense for the year then ended.

You must briefly explain your answers to receive credit:

Goodwill $-$ Increase, decrease or stay the same?

Interest expense $-$ increase, decrease or stay the same?

Brief explanation as to the why: