Two years ago American Insulation Corporation issued 10 percent, $990,000, 8-year bonds for $865,000. American Insulation exercised its call privilege and retired the bonds for $930,000. 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.)

Answer is complete but not entirely correct. No Event Credit Debit 990,000 37,125 General Journal Bonds payable Loss on early extinguishment Discount on bonds payable Cost of goods sold Cash 3,375 93,750 930,000