Check my work Three years ago American Insulation Corporatio

Check my work Three years ago American Insulation Corporation issued 10 percent, $820,000, 10-year bonds for $780,000. American Insulation exercised its call privilege and retired the bonds for $810,000. The corporation uses the straight-line method to determine interest. Required Prepare the journal entry to record the call of the bonds. (If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field.) View transaction list Journal entry worksheet

Solution

Journal entry to record the call of the bonds :

Date	accounts & explanation	debit	credit
	Bonds payable	820000
	Loss on Bonds retirement	18000
	Discount on bonds amortization (40000-12000)		28000
	Cash a/c		810000
	(To record call bonds)