BONDS ISSUED AT FACE VALUE WITH SINKING FUND Martin Manufacturing issued the following bonds:

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

Principal amount: ........$500,000

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

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

Life of bonds: ..........10 years

Stated rate: .................10%, payable semiannually on.....................................September 30 and March 31

Annual sinking fund requirement: .$34,000, payable 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 $2,400 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 $1,050 from the sinking fund to the corporation.