The balance sheet of Indian River Electronics Corporation as of December 31, 2017, included 13% bonds having a face amount of $90.3 million. The bonds had been issued in 2010 and had a remaining discount of $3.3 million at December 31, 2017. On January 1, 2018, Indian River Electronics called the bonds before their scheduled maturity at the call price of 102. Required: Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Dr  Bonds payable                                      $90,300,000

Dr loss on early redemption of bonds        $5,106,000  

Cr Discounts on bonds payable                                             $3,300,000

Cr Cash                                                                                      $92,106,000

Explanation:

The amount of cash paid to bondholders by calling the bonds is the 102% of the face value of $90.3 million i.e $90.3*102%=$92,106,000

The proceeds would debited to cash while the face value of the bond of $90.3 million would be debited to bonds payable account.

In addition the remaining discount of $3.3 million would credited to discounts on bonds payable account.

The loss or gain on the bond call can then be determined as appropriate.