BOND SINKING FUNDS Sheng Corporation pays $50,000 into a bond sinking fund each year for the future

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BOND SINKING FUNDS Sheng Corporation pays $50,000 into a bond sinking fund each year for the future redemption of bonds. At the end of the first year, earnings on the sinking fund are $4,750. When the bonds mature, there is a balance in the sinking fund of $502,125, of which $500,000 is used to redeem the bonds.

Prepare journal entries to record:

(a) The initial sinking fund deposit.

(b) The first year’s earnings.

(c) The redemption of the bonds.

(d) The return of excess cash to the corporation.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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College Accounting

ISBN: 978-0538745192

20th Edition

Authors: Heintz and Parry

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