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Three years ago American Insulation Corporation issued 10 percent, $800,000, 10-year bonds for $770,000. Debt issue costs were $3,000. American Insulation exercised its call privilege and retired the bonds for $790,000. The corporation uses the straight-line method both to determine interest and to amortize debt issue costs.
Required:
Prepare the journal entry to record the call of the bonds.
Recognized the employer Social Security and Medicare payroll tax that has not been paid on $7,000 of salaries expense.
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