Check my work Three years ago American Insulation Corporation issued 10 percent,

Question

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

Explanation / Answer

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)

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