How would you handle this?

[Willow]

I do not allow name calling in our home. We haven't had any problems with it until today. My daughter just called her brother a stupid idiot. I know it could have been worse, you know, more vulgar names, but still, uncalled for!

I called her out and asked who she was calling a stupid idiot and she said "I didn't" but I heard her plain as day, so now she is lying on top of it! I then said, "then why did you say it" to which she replies "I didn't mean it."

I think my mom would have used soap. I made my daughter put her nose on the wall and she is standing there now crying.

Has anyone else dealt with the name calling?