sinking fund accounting entries

An accounting entry that either increases an Asset, or decreases a Liability or Fund Equity. The salient feature of sinking fund method is that it provides funds for replacement of the asset. It is suitable for plant and machinery and many other wasting assets, which require replacement. A bond sinking fund is a restricted asset of a corporation that was required to set aside money for redeeming or buying back some of its bonds payable. The bond sinking fund begins when the corporation deposits money with an independent trustee. The trustee then invests the money in order for the balance

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sinking fund accounting entries
bond sinking fund accounting entry

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