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.