Please show all work and explain how you got the answer. Thank you kindly. Three

Question

Please show all work and explain how you got the answer. Thank you kindly.

Three years ago American Insulation Corporation issued 10 percent, $980,000, 10-year bonds for $860,000. American Insulation exercised its call privilege and retired the bonds for $920,000. 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 Record the call of the bonds. Note: Enter debits before credits. Event General Journal Debit Credit s payable ss on early extinguishment Discount on bonds payable Cash Record entry Clear entry View general journal

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Bonds payable 980000 Loss on early extinguishment 24000 Discount on bonds payable 84000 Cash 920000

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