My starting point is a holographic model of the Kondo effect recently proposed by Erdmenger et. al., i.e. of a magnetic impurity interacting with a strongly coupled system. Specifically, I focus on the challenges of computing gravitational backreaction in this model, which demands a study of the Israel junction conditions. I present general results on these junction conditions, including analytical solutions for certain toy models, that may be relevant also more generally in the AdS/boundary CFT correspondence. Furthermore, similar junction conditions for a bulk Chern-Simons field appearing in the holographic Kondo model are discussed. I then focus on the computation and interpretation of entanglement entropy in this holographic model.