Wall corner repair

My wife and I just bought our first home four months ago and despite the fact that it's a brand new home, we're getting a real crash-course in home repair. The house is withstanding a great deal of the abuse inflicted on it by my 2- and 8-year-old, but just recently, my son took a small chunk out of the corner of one of our walls with one of his toys.
Better to show than tell:
http://home.comcast.net/~inkswamp1/oops.jpg
As you can see from the pic, he knocked the paint and material completely off the corner in question, exposing the steel surface underneath. Now, if this were just a spot of chipped paint, it would be a no-brainer, but what should a newbie home owner like me do here? I assume I need to put something in there first to fill it in before repainting, but I have no clue as to what that would be.
Any pointer or web sites with tutorials would be greatly appreciated. Thanks.
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1. Slap the crap out of the little shit so it doesn't happen again.
2. Buy a small container of "spackle", a 1" & a 4" putty knife, a couple of sanding sponges and a high quality 2" paint brush. (All of this stuff will be used repeatedly in the next 20 years)
3. Apply the spackle with the putty knife, let it dry, sand with sponge (first with rougher one, then less rough one), dust off and retouch with matching paint. (You do have matching paint left by the builder, don't you?) If not, H-D or Lowe's can mix quart if you provide them a sample chip.

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LOL! Well, he's 2, so for now we'll hold off on that, but if this happens when he gets older I'll take your advice into consideration. ;^)

This is sort of what I suspected would be the first step but I wasn't sure and I didn't know if there were other things I had to do prior to spackling since this went right down to the metal surface under the corner.
Thanks.
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After spackling and smoothing look closely to see if texture is required. Big box stores carry it in spray can, though pricey. If he's only two chances are great you'll need texture spray for several years.

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If you want reproduce the texture, you can buy two part silicone based molding putty at hobby stores and make a mold from it by spreading a thick layer on an undamaged area of the wall. Buy the kind that says easy release, which most silicones are. Then use a thicker application of the spackle and while it's still soft press the mold into it.
I used this method on a wall where the gouge was big and very visible. You might be able to get away with using a damp, coarse sponge on the corner.
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That's a great idea that I wouldn't have thought of. I can thing of several uses for a technique like that.
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OK, slapping the crap out of him may not be a PC thing to do these days, but if you wait until he's older to discipline him when he does something he shouldn't.... good luck! There's a whole branch of the government that deals with people that weren't properly taught right from wrong at an early age - it's called the Department of Correction in most states!
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This is off-topic, and as much as I appreciate the help with the wall, I have to respectfully disagree. As someone who was raised with that kind of discipline, I can assure you that it does not work. I still got into trouble even though I was physically disciplined, and I just ended up resenting my parents. Lose-lose situation. It creates an atmosphere of fear not respect which is the key to making a child *want* to behave. Which is more effective? A child who behaves because he respects you and wants to live up to your expectations, or a child who behaves because he's fearful and doesn't want to be spanked? The former will behave when you're not around, the latter won't.
My wife and I have had extraordinarily good results with taking away privileges from our older child (i.e., no TV, no video games, no park, no friends overs, etc.) and there's no intimidation going on with that approach. For the 2-year-old, simple but stern explanations appear to go a long way. We've managed to put an end to him hitting his older sister as well as biting and scratching. The ding in the wall was the accidental result of him running through the house with a toy in his hand. There's little sense in disciplining in that case.

You'll find that, statistically, children raised with inattentive parents (and so, by extension, the single-parent households that conservatives love to focus on so intently) are the ones who end up in that system most often. By that fact alone, any parent who disciplines, physically or otherwise, is doing the right thing. However, I think some forms of discipline can yield bad side-effects while not being particularly effective.
One other thing (and this will bring things back around to being on-topic somewhat) I've also found that expecting a child to correct their own mistakes can be very effective too. If it were my 8-year-old who had dinged the wall, I would expect her to help with the repair. Not only does that represent a form of discipline (what kid wants to sit there doing that kind of thing when the neighbor kids are outside playing?) but it's a great learning experience to boot. As a result of that, I can stop my daughter from misbehaving most of the time by asking her, "What's wrong with what you're doing right now?" She'll come back with an explanation and will stop immediately.
Wow... didn't mean to carry on like this, but it's a topic that really gets me going. There are lots of ways to handle discipline that don't involve hitting.
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Actually, since the wall is textured, you're in luck (assuming you can match the paint.) Basically, just get a small tub of drywall joint compound, or "Spackle", and spoon it on there. The good thing is you can do a sloppy job because the wall's not flat. Use your fingers to put it on if you like, and just get it to look rough like the surrounding wall. If you have a can of the paint left over, obviously use that. If not, bring in another little chunk of the wall to a store for them to match. Worst case scenario you'll have to repaint the walls (up to a corner) if you can't get an exact match.
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