The balance sheet of Indian River Electronics Corporation as of December 31, 2010, included 12.25% bonds having a face amount of $90 million. The bonds had been issued in 2003 and had a remaining discount of $3 million at December 31, 2010. On January 1, 2011, Indian River Electronics called the bonds before their scheduled maturity at the call price of 102.Required:Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2011. (Enter your answers in dollars not in millions. Omit the "$" sign in your response.)CR. DR.Bonds Payable $90,000,000Loss on early Extinguishment $?????Cash ?????Discount on Bonds Payable $3,000,000I can't figure out the loss and cash amounts. If someone could help that'd be great!

When bonds are quoted, they are stated n terms of a percentage of the face amount. A $1,000 bond with a call price of 101 will sell for $1,010. $1,000*1.01 = $1,010

So, the credit cash should be $91,800,000

Discount = $3 million

So,

The loss on early extinguishment:

= Cash + Discount - Bonds Payable

= $91,800,000 + $3,000,000 - $90,000,000

= $4,800,000

Therefore, the journal entry is as follows:

Bonds Payable A/c Dr. $90 million

Loss on Early Extinguishment A/c Dr. $4.8 million

To Cash $91.8 million

To Discount $3 million

(To record the redemption of the bonds at January 1, 2011)