Question

A fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue is called

Answer 1

Answer: Sinking fund

Explanation: A sinking fund is a fund containing money set aside or saved to pay off a debt or bond. A company that issues debt will need to pay that debt off in the future, and the sinking fund helps to soften the hardship of a large outlay of revenue. A sinking fund is established so the company can contribute to the fund in the years leading up to the bond's maturity.