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 for the transactions below. If an amount box does not require an entry, leave it blank. a. The initial sinking fund deposit.