BONDS ISSUED AT FACE VALUE WITH SINKING FUND Creswell Entertainment issued the following bonds:

Date of issue and sale: ........April 1, 20-1

Principal amount: ..........$600,000

Sale price of bonds: .........100

Denomination of bonds: ......$10,000

Life of bonds: ..........20 years

Stated rate: ............8%, payable semiannually on

.................September 30 and March 31

Annual sinking fund requirement: ....$40,000, payable on June 1

REQUIRED

Prepare journal entries for:

(a) Issuance of the bonds.

(b) Deposit to sinking fund on June 1.

(c) Interest payment on the bonds on September 30, 20-1.

(d) Earnings of $3,000 on the sinking fund in 20-1.

(e) Year-end adjustment on the bonds for 20-1.

(f) Reversing entry for the beginning of 20-2.

(g) Interest payments on the bonds for 20-2 (March 31 and September 30).

(h) Redemption at maturity from the sinking fund.

(i) Return of excess cash of $1,900 from the sinking fund to the corporation.