While not all of Episode 7 was based in comic book storylines, most of what took place between Carl and Negan at the sanctuary was directly from Issue 105. There were panels and lines of dialogue taken straight from the comics, and fans would have been stoked to see the Negan/Carl relationship progress further after their first few interactions.
After admitting that Carl actually scared him, Negan then humiliated the young Grimes by forcing him to reveal his gruesome eye wound and forcing him to sing a song — hence the episode title. But not content with simple embarrassing Carl, Negan then shocked him to his core by making him watch on as he dished out Negan's other favored form of punishment, a hot iron to the face. Yeouch.