CORPORATE INCOME FUND MON PYMT SER 502 DEFINED ASSET FDS
485BPOS, 2000-12-13
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   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 13, 2000

                                                      REGISTRATION NO. 333-70851
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                       ---------------------------------

                         POST-EFFECTIVE AMENDMENT NO. 1
                                       TO
                                    FORM S-6
                       ---------------------------------

                   FOR REGISTRATION UNDER THE SECURITIES ACT
                    OF 1933 OF SECURITIES OF UNIT INVESTMENT
                        TRUSTS REGISTERED ON FORM N-8B-2
                         ------------------------------

A. EXACT NAME OF TRUST:
                             CORPORATE INCOME FUND
                          MONTHLY PAYMENT SERIES--502
                              DEFINED ASSET FUNDS

B. NAME OF DEPOSITORS:

                   MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
                           SALOMON SMITH BARNEY INC.
                            PAINEWEBBER INCORPORATED
                           DEAN WITTER REYNOLDS INC.

C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:

<TABLE>
<S>                        <C>                        <C>
 MERRILL LYNCH, PIERCE,                               SALOMON SMITH BARNEY INC.
     FENNER & SMITH                                         388 GREENWICH
      INCORPORATED                                       STREET--23RD FLOOR
   DEFINED ASSET FUNDS                                   NEW YORK, NY 10013
  POST OFFICE BOX 9051
PRINCETON, NJ 08543-9051
</TABLE>

<TABLE>
<S>                        <C>                        <C>
PAINEWEBBER INCORPORATED                              DEAN WITTER REYNOLDS INC.
   1285 AVENUE OF THE                                      TWO WORLD TRADE
        AMERICAS                                         CENTER--59TH FLOOR
   NEW YORK, NY 10019                                    NEW YORK, NY 10048
</TABLE>

D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:

<TABLE>
<CAPTION>

<S>                        <C>                        <C>
  TERESA KONCICK, ESQ.                                    MICHAEL KOCHMANN
      P.O. BOX 9051                                     388 GREENWICH STREET
PRINCETON, NJ 08543-9051                                 NEW YORK, NY 10013
                                  COPIES TO:
    ROBERT E. HOLLEY         NORA M. JORDAN, ESQ.        DOUGLAS LOWE, ESQ.
    1200 HARBOR BLVD.        450 LEXINGTON AVENUE     DEAN WITTER REYNOLDS INC.
   WEEHAWKEN, NJ 07087        NEW YORK, NY 10017           TWO WORLD TRADE
                                                         CENTER--59TH FLOOR
                                                         NEW YORK, NY 10048
</TABLE>

The issuer has registered an indefinite number of Units under the Securities Act
of 1933 pursuant to Rule 24f-2 and filed the Rule 24f-2 Notice for the most
recent fiscal year on March 21, 2000.

Check box if it is proposed that this filing will become effective on December
22, 2000 pursuant to paragraph (b) of Rule 485.  /X/
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                           DEFINED ASSET FUNDS-REGISTERED TRADEMARK-
                           ----------------------------------------------------

                           CORPORATE INCOME FUND
                           MONTHLY PAYMENT SERIES--502
                           (A UNIT INVESTMENT TRUST)

                           -  PORTFOLIO OF LONG TERM CORPORATE BONDS
                           -  DESIGNED FOR HIGH CURRENT INCOME
                           -  MONTHLY INCOME DISTRIBUTIONS
                           -  U.S. TAX EXEMPT FOR MANY FOREIGN HOLDERS

SPONSORS:
MERRILL LYNCH,             -----------------------------------------------------
PIERCE, FENNER & SMITH     The Securities and Exchange Commission has not
INCORPORATED               approved or disapproved these Securities or passed
SALOMON SMITH BARNEY INC.  upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED   representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC.  Prospectus dated December 22, 2000.

<PAGE>
--------------------------------------------------------------------------------

Defined Asset Funds-Registered Trademark-
Defined Asset Funds-Registered Trademark- is America's oldest and largest family
of unit investment trusts, with over $160 billion sponsored over the last 28
years. Defined Asset Funds has been a leader in unit investment trust research
and product innovation. Our family of Funds helps investors work toward their
financial goals with a full range of quality investments, including municipal,
corporate and government bond portfolios, as well as domestic and international
equity portfolios.

Defined Asset Funds offer a number of advantages:
   - A disciplined strategy of buying and holding with a long-term view is the
     cornerstone of Defined Asset Funds.
   - Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
     funds are not managed and portfolio changes are limited.
   - Defined Portfolios: We choose the stocks and bonds in advance, so you know
     what you're investing in.
   - Professional research: Our dedicated research team seeks out stocks or
     bonds appropriate for a particular fund's objectives.
   - Ongoing supervision: We monitor each portfolio on an ongoing basis.

No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.

THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF THE EVALUATION DATE,
AUGUST 31, 2000.

CONTENTS

<TABLE>
<CAPTION>
                                                    PAGE
                                                    ----
<S>                                                 <C>
Risk/Return Summary...............................    3
What You Can Expect From Your Investment..........    6
  Monthly Income..................................    6
  Return Figures..................................    6
  Records and Reports.............................    6
The Risks You Face................................    7
  Interest Rate Risk..............................    7
  Call Risk.......................................    7
  Reduced Diversification Risk....................    7
  Liquidity Risk..................................    7
  Concentration Risk..............................    7
  Bond Quality Risk...............................    7
  Litigation Risk.................................    8
Selling or Exchanging Units.......................    8
  Sponsors' Secondary Market......................    8
  Selling Units to the Trustee....................    8
  Exchange Option.................................    9
How The Fund Works................................    9
  Pricing.........................................    9
  Evaluations.....................................    9
  Income..........................................   10
  Expenses........................................   10
  Portfolio Changes...............................   10
  Fund Termination................................   11
  Certificates....................................   11
  Trust Indenture.................................   11
  Legal Opinion...................................   12
  Auditors........................................   12
  Sponsors........................................   12
  Trustee.........................................   13
  Underwriters' and Sponsors' Profits.............   13
  Public Distribution.............................   13
  Code of Ethics..................................   13
  Year 2000 Issues................................   13
Taxes.............................................   14
Supplemental Information..........................   15
Financial Statements..............................  D-1
</TABLE>

                                       2
<PAGE>
--------------------------------------------------------------------------------

RISK/RETURN SUMMARY

 1. WHAT IS THE FUND'S OBJECTIVE?
   The Fund seeks high current interest income by investing in a fixed portfolio
   consisting primarily of corporate bonds.

 2. WHAT ARE CORPORATE BONDS?
   Corporate bonds are bonds issued by companies, governments or other
   institutions to raise money to use in their business or to fund their
   activities. In return, they pay a fixed rate of interest and principal at
   maturity.

 3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
 - The Fund plans to hold to maturity 14 long-term corporate bonds with a
   current aggregate face amount of $44,602,000.

 - The Fund is a unit investment trust which means that, unlike a mutual fund,
   the Fund's portfolio is not managed.

 - When the bonds were initially deposited (September 1, 1999), they were rated
   A or better by Standard & Poor's, Moody's or Fitch. THE CREDIT QUALITY OF THE
   BONDS MAY CURRENTLY BE LOWER.

 - Many of the bonds can be called at a premium declining over time to par
   value. Some bonds may be called earlier at par for extraordinary reasons.

   The Portfolio consists of corporate bonds of the following types of issuers:

<TABLE>
<CAPTION>
                                                    APPROXIMATE
                                                     PORTFOLIO
                                                    PERCENTAGE
<S>                                                 <C>
-Conglomerates                                             8%
-Consumer Goods Companies                                  8%
-Financial Institutions                                   33%
-Manufacturing                                            24%
-Oil/Gas                                                   8%
-Retailing                                                16%
-U.S. Government                                           3%
</TABLE>

 4. WHAT ARE THE SIGNIFICANT RISKS?
   YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN HAPPEN FOR VARIOUS
   REASONS, INCLUDING:

 - Rising interest rates, an issuer's worsening financial condition or a drop in
   bond ratings can reduce the price of your units.

 - Because the Fund is concentrated in financial institution bonds, adverse
   developments in this industry may affect the value of your units.

 - Assuming no changes in interest rates, when you sell your units, they will
   generally be worth less than your cost because your cost included a sales
   fee.

 - The Fund will receive early returns of principal if bonds are called or sold
   before they mature. If this happens your income will decline and you may not
   be able to reinvest the money you receive at as high a yield or as long a
   maturity.

 5. IS THIS FUND APPROPRIATE FOR YOU?
   Yes, if you want current monthly income. You will benefit from a
   professionally selected and supervised portfolio whose risk is reduced by
   investing in bonds of several different issuers.

   The Fund is NOT appropriate for you if you want a speculative investment that
   changes to take advantage of market movements or if you cannot tolerate any
   risk.

                                       3
<PAGE>
                              DEFINING YOUR INCOME

<TABLE>
<S>                                                 <C>
WHAT YOU MAY EXPECT (Payable on the 25th day each
month):
Regular Monthly Income per 1,000 units:             $5.72
Annual Income per 1,000 units:                      $68.72
RECORD DAY: 10th day of each month
THESE FIGURES ARE ESTIMATES ON THE EVALUATION DATE; ACTUAL
PAYMENTS MAY VARY.
</TABLE>

 6. WHAT ARE THE FUND'S FEES AND EXPENSES?
   This table shows the costs and expenses you may pay, directly or indirectly,
   when you invest in the Fund.

<TABLE>
<S>                                                 <C>
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of $1,000
invested)                                           3.50%
</TABLE>

   You will pay an up-front sales fee of 1%, as well as a deferred sales fee of
   $25.00 per 1,000 units quarterly November, February, May and August through
           , 2000. Employees of some of the Sponsors and their affiliates may be
   charged a reduced sales fee of no less than $5.00 per Unit.

   The maximum sales fee is reduced if you invest at least $100,000, as follows:

<TABLE>
<CAPTION>
                                                    YOUR MAXIMUM
                                                     SALES FEE
                  IF YOU INVEST:                      WILL BE:
                  --------------                    ------------
<S>                                                 <C>
Less than $100,000                                        3.50%
$100,000 to $249,999                                      3.25%
$250,000 to $499,999                                      3.00%
$500,000 to $999,999                                      2.75%
$1,000,000 and over                                       2.50%

Maximum Exchange Fee                                      2.50%
</TABLE>

   ESTIMATED ANNUAL FUND OPERATING EXPENSES

<TABLE>
<CAPTION>
                                                        AMOUNT
                                                    PER 1,000 UNITS
                                                    ---------------
<S>                                                 <C>
Trustee's Fee                                            $0.61
Portfolio Supervision,
 Bookkeeping and
 Administrative Fees
 (including updating
 expenses)                                               $0.55
Evaluator's Fee                                          $0.31
Other Operating Expenses                                 $0.17
                                                         -----
TOTAL                                                    $1.64
</TABLE>

   The Sponsors historically paid updating expenses.

 7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
   IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE OF PRIOR MONTHLY PAYMENT
   SERIES OF CORPORATE INCOME FUND, WHICH HAD THE SAME INVESTMENT OBJECTIVES,
   STRATEGIES AND TYPES OF BONDS AS THIS FUND. THESE PRIOR SERIES DIFFERED IN
   THAT THEY CHARGED A HIGHER SALES FEE. These prior Monthly Payment Series were
   offered after 1987 and were outstanding on September 30, 2000. OF COURSE,
   PAST PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE RESULTS OF THIS
   FUND.

   AVERAGE ANNUAL COMPOUND TOTAL RETURNS
                    FOR PRIOR SERIES
     REFLECTING ALL EXPENSES. FOR PERIODS ENDED 9/30/00.

<TABLE>
<CAPTION>
               WITH SALES FEE          NO SALES FEE
               1 YEAR     5 YEARS     1 YEAR     5 YEARS
<S>         <C>           <C>      <C>           <C>
--------------------------------------------------------
High               3.61%   5.25%          7.27%   6.42%
Average            0.84    4.67           4.41    5.82
Low               -2.88    4.09           0.53    5.25
--------------------------------------------------------
Average
Sales fee          3.34%   5.72%
--------------------------------------------------------
</TABLE>

NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE CORPORATE FUND INVESTMENT ACCUMULATION PROGRAM.

 8. IS THE FUND MANAGED?
   Unlike a mutual fund, the Fund is not managed and bonds are not sold because
   of market changes. Rather, experienced Defined Asset Funds financial analysts
   regularly review the bonds in the Fund. The Fund may sell a bond if certain
   adverse credit or other conditions exist.

 9. HOW DO I BUY UNITS?
   The minimum investment is one unit.

   You can buy units from any of the Sponsors and other broker-dealers. The
   Sponsors are listed later in this prospectus. Some banks may offer units for
   sale through special arrangements with the Sponsors, although certain legal
   restrictions may apply.

                                       4
<PAGE>

<TABLE>
<S>                                                 <C>
UNIT PRICE PER 1,000 UNITS                          $937.31
(as of August 31, 2000)
</TABLE>

   Unit price is based on the net asset value of the Fund plus the up-front
   sales fee. An amount equal to any principal cash, as well as net accrued but
   undistributed interest on the unit, is added to the unit price. An
   independent evaluator prices the bonds at 3:30 p.m. Eastern time every
   business day. Unit price changes every day with changes in the prices of the
   bonds in the Fund.

10. HOW DO I SELL UNITS?
   You may sell your units at any time to any Sponsor or the Trustee for the net
   asset value determined at the close of business on the date of sale, less any
   remaining deferred sales fee. You will not pay any other fee when you sell
   your units.

11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
   The Fund pays income monthly. Interest on the bonds in this Fund is subject
   to federal income taxes for U.S. investors, but if you are a non-U.S.
   investor, your interest may be exempt from U.S. federal income taxes,
   including withholding taxes. Interest on the U.S. Treasury notes will be
   exempt from state and local personal income taxes.

   You will also receive principal payments if bonds are sold or called or
   mature, when the cash available is more than $5.00 per 1,000 units. You will
   be subject to tax on any gain realized by the Fund on the disposition of
   bonds.

12. WHAT OTHER SERVICES ARE AVAILABLE?

   REINVESTMENT
   You will receive your monthly income in cash unless you choose to compound
   your income by reinvesting at no sales fee in the Corporate Fund Investment
   Accumulation program, Inc. This program is an open-end mutual fund with a
   comparable investment objective. Income from this program will be subject to
   U.S. federal income taxes for both U.S. and foreign investors. FOR MORE
   COMPLETE INFORMATION ABOUT THE PROGRAM, INCLUDING CHARGES AND FEES, ASK THE
   TRUSTEE FOR THE PROGRAM'S PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST.
   THE TRUSTEE MUST RECEIVE YOUR WRITTEN ELECTION TO REINVEST AT LEAST 10 DAYS
   BEFORE THE RECORD DAY OF AN INCOME PAYMENT.

   EXCHANGE PRIVILEGES
   You may exchange units of this Fund for units of certain other Defined Asset
   Funds. You may also exchange into this Fund from certain other funds. We
   charge a reduced sales fee on exchanges.

                                       5
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT

MONTHLY INCOME

The Fund will pay you regular monthly income. Your monthly income may vary
because of:

  - elimination of one or more bonds from the Fund's portfolio because of calls,
    redemptions or sales;
  - a change in the Fund's expenses; or
  - the failure by a bond's issuer to pay interest.

Changes in interest rates generally will not affect your monthly income because
the portfolio is fixed.

Along with your monthly income, you will receive your share of any available
bond principal.

RETURN FIGURES

We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.

ESTIMATED CURRENT RETURN equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):

<TABLE>
<S>               <C><C>
Estimated Annual        Estimated
Interest Income   -  Annual Expenses
------------------------------------
             Unit Price
</TABLE>

ESTIMATED LONG TERM RETURN is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.

Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.

These return quotations are designed to be comparative rather than predictive.

RECORDS AND REPORTS

You will receive:

- a monthly statement of income payments and any principal payments;
- a notice from the Trustee when new bonds are deposited in exchange or
  substitution for bonds originally deposited;
- an annual report on Fund activity; and
- annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
  AMOUNT OF INTEREST RECEIVED DURING THE YEAR.

You may request:

- copies of bond evaluations to enable you to comply with federal and state tax
  reporting requirements; and
- audited financial statements of the Fund.

You may inspect records of Fund transactions at the Trustee's office during
regular business hours.

                                       6
<PAGE>
THE RISKS YOU FACE

INTEREST RATE RISK

Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.

CALL RISK

Many bonds can be prepaid or "called" by the issuer before their stated
maturity. For example, some bonds may be required to be called pursuant to
mandatory sinking fund provisions.

Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.

If the bonds are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.

REDUCED DIVERSIFICATION RISK

If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.

LIQUIDITY RISK

The bonds will generally trade in the over-the-counter market. We cannot assure
you that a liquid trading market will exist, especially since current law may
restrict the Fund from selling bonds to any Sponsor. The value of the bonds, and
of your investment, may be reduced if trading in bonds is limited or absent.

CONCENTRATION RISK

When a certain type of bond makes up 25% or more of the portfolio, the Fund is
said to be "concentrated" in that bond type, which makes the Fund less
diversified.

Here is what you should know about the Fund's concentration in bonds issued by
financial institutions:

  - the profitability of a financial institution is largely dependent upon the
    credit quality of its loan portfolio; credit quality of its loan portfolio
    is affected by the institution's underwriting criteria, concentrations
    within the portfolio and industry and general economic conditions; and
  - operating performance of a financial institution is also impacted by changes
    in interest rates, the availability and cost of funds, intensity of
    competition and degree of government regulation.

Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentration over time.

BOND QUALITY RISK

A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.

                                       7
<PAGE>
LITIGATION RISK

We do not know of any pending litigation that might have a material adverse
effect upon the Fund.

SELLING OR EXCHANGING UNITS

You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:

  - ADDING the value of the bonds, net accrued interest, cash and any other Fund
    assets;
  - SUBTRACTING accrued but unpaid Fund expenses, unreimbursed Trustee advances,
    cash held to buy back units or for distribution to investors and any other
    Fund liabilities; and
  - DIVIDING the result by the number of outstanding units.

Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.

If you sell your units before the final deferred sales fee installment, the
amount of any remaining installments will be deducted from your proceeds.

SPONSORS' SECONDARY MARKET

While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge other than any remaining deferred sales charge.
We may resell the units to other buyers or to the Trustee. You should consult
your financial professional for current market prices to determine if other
broker-dealers or banks are offering higher prices.

We have maintained a secondary market continuously for over 28 years, but we
could discontinue it without prior notice for any business reason.

SELLING UNITS TO THE TRUSTEE

Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.

Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.

As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.

If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.

                                       8
<PAGE>
If you acquire 25% or more of the outstanding units of the Fund and you sell
units with a value exceeding $250,000, the Trustee may choose to pay you "in
kind" by distributing bonds and cash with a total value equal to the price of
those units. The Trustee will try to distribute bonds in the portfolio pro rata,
but it reserves the right to distribute only one or a few bonds. The Trustee
will act as your agent in an in kind distribution and will either hold the bonds
for your account or sell them as you instruct. You must pay any transaction
costs as well as transfer and ongoing custodial fees on sales of bonds
distributed in kind.

There could be a delay in paying you for your units:

  - if the New York Stock Exchange is closed (other than customary weekend and
    holiday closings);
  - if the SEC determines that trading on the New York Stock Exchange is
    restricted or that an emergency exists making sale or evaluation of the
    bonds not reasonably practicable; and
  - for any other period permitted by SEC order.

EXCHANGE OPTION

You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 2.50%. You may exchange units of this Fund for units
of certain other funds at a reduced sales fee if your investment goals change.
To exchange units, you should talk to your financial professional about what
funds are exchangeable, suitable and currently available.

Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.

We may amend or terminate this exchange option at any time without notice.

HOW THE FUND WORKS

PRICING

The price of a unit includes interest accrued on the bonds, less expenses, from
the most recent Record Day up to, but not including, the settlement date, which
is usually three business days after the purchase date of the unit.

A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.

In addition, as with mutual funds, the Fund (and therefore the investors) pay
all or some of the costs of organizing the Fund including:

  - cost of initial preparation of legal documents;
  - federal and state registration fees;
  - initial fees and expenses of the Trustee;
  - initial audit; and
  - legal expenses and other out-of-pocket expenses.

EVALUATIONS

An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange:

                                       9
<PAGE>
New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas). Bond
values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered bonds has ranged from 0.25% of face amount on actively traded issues to
1.5% on inactively traded issues; the difference has averaged between 0.5% and
1%.

INCOME

The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.

EXPENSES

The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:

  - to reimburse the Trustee for the Fund's operating expenses;
  - for extraordinary services and costs of indemnifying the Trustee and the
    Sponsors;
  - costs of actions taken to protect the Fund and other legal fees and
    expenses;
  - expenses for keeping the Fund's registration statement current; and
  - Fund termination expenses and any governmental charges.

The Sponsors are currently reimbursed up to 55 CENTS per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Portfolio's registration statement yearly are also
now chargeable to the Portfolio. While this fee may exceed the amount of these
costs and expenses attributable to this Fund, the total of these fees for all
Series of Defined Asset Funds will not exceed the aggregate amount attributable
to all of these Series for any calendar year. The Fund also pays the Evaluator's
fees.

Any quarterly deferred sales charges you owe are paid with interest and
principal from certain bonds. If these amounts are not enough, the rest will be
paid out of distributions to you from the Fund's Capital and Income Accounts.

The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.

The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.

PORTFOLIO CHANGES

The Sponsors and Trustee are not liable for any default or defect in a bond.

Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial

                                       10
<PAGE>
circumstances occur. However, we may sell a bond in certain cases if we believe
that certain adverse credit or certain other conditions exist.

If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which may affect the
composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.

We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:

  - diversity of the portfolio;
  - size of the Fund relative to its original size;
  - ratio of Fund expenses to income;
  - current and long-term returns;
  - degree to which units may be selling at a premium over par; and
  - cost of maintaining a current prospectus.

FUND TERMINATION

The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.

When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.

You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.

CERTIFICATES

Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.

TRUST INDENTURE

The Fund is a "unit investment trust" governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.

The Sponsors and the Trustee may amend the Indenture without your consent:

  - to cure ambiguities;
  - to correct or supplement any defective or inconsistent provision;
  - to make any amendment required by any governmental agency; or
  - to make other changes determined not to be materially adverse to your best
    interest (as determined by the Sponsors).
                                       11
<PAGE>
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.

The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:

  - it fails to perform its duties and the Sponsors determine that its
    replacement is in your best interest; or
  - it becomes incapable of acting or bankrupt or its affairs are taken over by
    public authorities.

Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.

Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:

  - remove it and appoint a replacement Sponsor;
  - liquidate the Fund; or
  - continue to act as Trustee without a Sponsor.

Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.

The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.

LEGAL OPINION

Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, has given an opinion that the units are
validly issued.

AUDITORS

Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.

SPONSORS

The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019

                                       12
<PAGE>
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.

TRUSTEE

The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee.

It is supervised by the Federal Deposit Insurance Corporation, the Board of
Governors of the Federal Reserve System and New York State banking authorities.

UNDERWRITERS' AND SPONSORS' PROFITS

Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial deposit of the bonds. Any cash made
available by you to the Sponsors before the settlement date for those units may
be used in the Sponsors' businesses to the extent permitted by federal law and
may benefit the Sponsors.

A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.

In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.

PUBLIC DISTRIBUTION

The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.

CODE OF ETHICS

The Fund and the Agent for the Sponsors have each adopted a code of ethics
requiring reporting of personal securities transactions by its employees with
access to information on Fund transactions. Subject to certain conditions, the
codes permit employees to invest in Fund securities for their own accounts. The
codes are designed to prevent fraud, deception and misconduct against the Fund
and to provide reasonable standards of conduct. These codes are on file with the
Commission and you may obtain a copy by contacting the Commission at the address
listed on the back cover of this prospectus.

YEAR 2000 ISSUES

Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the "Year
2000 Problem"). To date we are not aware of any major operational difficulties
resulting from the computer system changes necessary to prepare for the Year
2000. However, there can be no assurance that the Year 2000 Problem will not
adversely affect the issuers of the bonds contained in the Portfolio. We cannot
predict whether any impact will be material to the Fund as a whole.

                                       13
<PAGE>
TAXES

The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or subject to
special rules. You should consult your own tax adviser about your particular
circumstances.

In the opinion of our counsel, under existing law:

GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT

The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.

GAIN OR LOSS UPON DISPOSITION

When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued "market
discount". Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.

If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term otherwise.
Because the deductibility of capital losses is subject to limitations, you may
not be able to deduct all of your capital losses. You should consult your tax
adviser in this regard.

YOUR BASIS IN THE BONDS

Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of "original issue discount," "acquisition premium" and
"bond premium". You should consult your tax adviser in this regard.

EXPENSES

If you are an individual who itemizes deductions, you may deduct your share of
Fund expenses, but only to the extent that such amount, together with your other
miscellaneous deductions, exceeds 2% of your adjusted gross income. Your ability
to deduct Fund expenses will be limited further if your adjusted gross income
exceeds a specified amount currently $128,950 ($64,475 for a married person
filing separately).

FOREIGN INVESTORS

If you are a foreign investor and you are not engaged in a U.S. trade or
business, you generally will not be subject to U.S. federal income tax,
including withholding tax, on the interest or gain on a bond issued after July
18, 1984 if you meet certain requirements, including the certification of
foreign status and other matters. You should consult your tax adviser about the
possible

                                       14
<PAGE>
application of federal, state and local, and foreign taxes.

SUPPLEMENTAL INFORMATION

You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolio, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.

                                       15
<PAGE>

          CORPORATE INCOME FUND,
          MONTHLY PAYMENT SERIES - 502,
          DEFINED ASSET FUNDS

          REPORT OF INDEPENDENT ACCOUNTANTS

          The Sponsors, Trustee and Holders of Corporate Income Fund, Monthly
          Payment Series - 502, Defined Asset Funds:

          We have audited the accompanying statement of condition of Corporate
          Income Fund, Monthly Payment Series - 502, Defined Asset Funds,
          including the portfolio, as of August 31, 2000 and the related
          statements of operations and of changes in net assets for the period
          September 2, 1999 to August 31, 2000. These financial statements are
          the responsibility of the Trustee. Our responsibility is to express an
          opinion on these financial statements based on our audit.

          We conducted our audit in accordance with auditing standards generally
          accepted in the United States of America. Those standards require that
          we plan and perform the audit to obtain reasonable assurance about
          whether the financial statements are free of material misstatement. An
          audit includes examining, on a test basis, evidence supporting the
          amounts and disclosures in the financial statements. Securities owned
          at August 31, 2000, as shown in such portfolio, were confirmed to us
          by The Chase Manhattan Bank, the Trustee. An audit also includes
          assessing the accounting principles used and significant estimates
          made by the Trustee, as well as evaluating the overall financial
          statement presentation. We believe that our audit provides a
          reasonable basis for our opinion.

          In our opinion, the financial statements referred to above present
          fairly, in all material respects, the financial position of Corporate
          Income Fund, Monthly Payment Series - 502, Defined Asset Funds at
          August 31, 2000 and the results of its operations and changes in its
          net assets for the above- stated period in conformity with accounting
          principles generally accepted in the United States of America.


          DELOITTE & TOUCHE LLP


          New York, N.Y.
          November 28, 2000


                                     D - 1.
<PAGE>

     CORPORATE INCOME FUND,
     MONTHLY PAYMENT SERIES - 502,
     DEFINED ASSET FUNDS


     STATEMENT OF CONDITION
     As of August 31, 2000

<TABLE>
     <S>                                                                                <C>             <C>
     TRUST PROPERTY:
       Investment in marketable securities -
          at value (cost $ 40,590,438 )(Note 1)........                                                 $40,521,314
       Accrued interest ...............................                                                     918,253
       Accrued interest on Segregated Bonds (Note 5) ..                                                      10,966
       Income payments receivable .....................                                                      24,290
       Cash - income on Segregated Bonds ..............                                                      32,376
       Cash - principal ...............................                                                     610,044
                                                                                                        -----------
         Total trust property .........................                                                  42,117,243


     LESS LIABILITIES:
       Income advance from Trustee.....................                                 $   753,185
       Principal payments payable .....................                                      88,044
       Trustee's fees and expenses payable ............                                         400
       Accrued Sponsors' fees .........................                                      11,882         853,511
                                                                                        -----------     -----------


     NET ASSETS, REPRESENTED BY:
       44,022,000 units of fractional undivided
          interest outstanding (Note 3)................                                  41,086,656

       Undistributed net investment income ............                                     177,076     $41,263,732
                                                                                        -----------     ===========

     UNIT VALUE ($ 41,263,732 / 44,022,000 units ) ....                                                 $    .93734
                                                                                                        ===========
</TABLE>

                       See Notes to Financial Statements.


                                     D - 2.
<PAGE>

     CORPORATE INCOME FUND,
     MONTHLY PAYMENT SERIES - 502,
     DEFINED ASSET FUNDS


     STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                                      September 2, 1999
                                                                                                             to
                                                                                                         August 31,
                                                                                                            2000
                                                                                                            ----

     <S>                                                                                                <C>
     INVESTMENT INCOME:
       Interest income ........................                                                         $ 1,870,801
       Interest income on Segregated
         Bonds (Note 5) .......................                                                              38,812
       Trustee's fees and expenses ............                                                             (29,665)
       Sponsors' fees .........................                                                             (14,745)
                                                                                                        ------------
       Net investment income ..................                                                           1,865,203
                                                                                                        ------------


       UNREALIZED DEPRECIATION
         OF INVESTMENTS .......................                                                             (69,124)
                                                                                                        ------------


     NET INCREASE IN NET ASSETS
       RESULTING FROM OPERATIONS ..............                                                         $ 1,796,079
                                                                                                        ============
</TABLE>

                       See Notes to Financial Statements.


                                     D - 3.
<PAGE>

     CORPORATE INCOME FUND,
     MONTHLY PAYMENT SERIES - 502,
     DEFINED ASSET FUNDS

     STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
                                                                                                     September 2, 1999
                                                                                                            to
                                                                                                        August 31,
                                                                                                           2000
                                                                                                           ----
<S>                                                                                                     <C>
     OPERATIONS:
       Net investment income ..................                                                         $ 1,865,203
       Unrealized depreciation
         of investments .......................                                                             (69,124)
                                                                                                        ------------
       Net increase in net assets
         resulting from operations ............                                                           1,796,079
                                                                                                        ------------
     DISTRIBUTIONS TO HOLDERS (Note 2):
       Income  ................................                                                          (1,739,006)
       Income on Segregated Bonds .............                                                             (11,415)
                                                                                                        ------------
       Total distributions ....................                                                          (1,750,421)
                                                                                                        ------------
     SHARE TRANSACTIONS:

       Subscription amounts:
         Income ...............................                                                              89,691
         Income on Segregated Bonds ...........                                                              15,945
         Principal ............................                                                          35,303,317
                                                                                                        ------------
       Net share transactions .................                                                          35,408,953
                                                                                                        ------------

     NET INCREASE IN NET ASSETS ...............                                                          35,454,611

     NET ASSETS AT BEGINNING OF PERIOD ........                                                           5,809,121
                                                                                                        ------------
     NET ASSETS AT END OF PERIOD ..............                                                         $41,263,732
                                                                                                        ============
     PER UNIT:
       Income distributions during period .....                                                         $    .06464
                                                                                                        ============
       Income distributions on Segregated
         Bonds during period ..................                                                         $    .00047
                                                                                                        ============

       Net asset value at end of period .......                                                         $    .93734
                                                                                                        ============
     TRUST UNITS:
       Issued during period ...................                                                          37,950,000
       Outstanding at end of period ...........                                                          44,022,000
                                                                                                        ============
</TABLE>

                       See Notes to Financial Statements.


                                     D - 4.
<PAGE>

          CORPORATE INCOME FUND,
          MONTHLY PAYMENT SERIES - 502,
          DEFINED ASSET FUNDS

          NOTES TO FINANCIAL STATEMENTS

     1.   SIGNIFICANT ACCOUNTING POLICIES

          The Fund is registered under the Investment Company Act of 1940 as a
          Unit Investment Trust. The following is a summary of significant
          accounting policies consistently followed by the Fund in the
          preparation of its financial statements. The policies are in
          conformity with accounting principles generally accepted in the United
          States of America.

           (A)      Securities are stated at value as determined by the
                    Evaluator based on bid side evaluations for the securities,
                    except that value on September 2, 1999 was based upon
                    offering side evaluations at August 31, 1999, the day prior
                    to the Date of Deposit. Cost of securities at September 2,
                    1999 was also based on such offering side evaluations.
                    Realized gains and losses on sales of securities are
                    determined using the first-in, first-out method.

           (B)      The Fund is not subject to income taxes. Accordingly, no
                    provision for such taxes is required.

           (C)      Interest income is recorded as earned.

     2.   DISTRIBUTIONS

          A distribution of net investment income is made to Holders each month.
          Receipts other than interest, after deductions for redemptions and
          applicable expenses, are also distributed periodically.

     3.   NET CAPITAL

<TABLE>
     <S>                                                                                                <C>
          Cost of 44,022,000 units at Date of Deposit ................                                  $41,112,438
          Transfer to capital of interest on Segregated Bonds (Note 5)                                       38,812
          Transfer to capital of interest on Segregated Bonds received
          from subscription amounts (Note 5) .........................                                       15,945
          Income distributions on Segregated Bonds ...................                                      (11,415)
          Net unrealized depreciation of investments .................                                      (69,124)
                                                                                                        -----------

          Net capital applicable to Holders ..........................                                  $41,086,656
                                                                                                        ===========
</TABLE>

     4.   INCOME TAXES

          As of August 31, 2000, net unrealized depreciation of investments,
          based on cost for Federal income tax purposes, aggregated $69,124, of
          which $242,106 related to depreciated securities and $172,982 related
          to appreciated securities. The cost of investment securities for
          Federal income tax purposes was $40,590,438 at August 31, 2000.


                                     D - 5.
<PAGE>

          CORPORATE INCOME FUND,
          MONTHLY PAYMENT SERIES - 502,
          DEFINED ASSET FUNDS

          NOTES TO FINANCIAL STATEMENTS

     5.   DEFERRED SALES CHARGE

          $1,102,000 face amount of United States Treasury Notes have been
          segregated to fund the deferred sales charges. The sales charges are
          being paid for by the maturity of these bonds, as well as principal
          proceeds received in conjunction with the disposition of the
          unsegregated bonds in the portfolio. A deferred sales charge of $3.13
          per 1,000 units will be charged the first year and $3.12 per 1,000
          units is charged the second year, and paid to the Sponsors
          periodically by the Trustee on behalf of the Holders, up to an
          aggregate of $25.00 per 1,000 units over the first two years of the
          life of the Fund. Should a Holder redeem units prior to the third
          anniversary of the Fund, the remaining balance of the deferred sales
          charge will be charged.


                                     D - 6.
<PAGE>

     CORPORATE INCOME FUND,
     MONTHLY PAYMENT SERIES - 502,
     DEFINED ASSET FUNDS

     PORTFOLIO
     As of August 31, 2000

<TABLE>
<CAPTION>
                                   Rating of Issues(1)
                                   --------------------
                                              Standard
                                   Moody's    & Poor's                                          Optional
     Portfolio No. and Title of    Investors  Corpora-     Face                                Redemption
            Securities             Service    tion        Amount        Coupon  Maturities(3) Provisions(3)    Cost(2)    Value(2)
            ----------             --------- ---------  -----------   --------- ------------  ------------  -----------  ----------
<S>                                  <C>        <C>     <C>             <C>          <C>       <C>          <C>         <C>
   1 Tyco International Group SA,    Baa1       A-      $ 3,625,000     6.875 %      2029      None         $ 3,145,647 $ 3,178,509
     Company Guaranty

   2 Coco-Cola Enterprises,          A2         A         3,625,000     6.950        2026      None           3,301,462   3,307,414
     Debentures

   3 ABN-AMRO Bank NV, Subordinated  Aa3        AA-       3,625,000     7.300        2026      None           3,316,738   3,330,904
     Debentures

   4 Bank One Corporation,           A1         A-        3,625,000     7.625        2026      None           3,465,892   3,448,608
     Subordinated Debentures

   5 Key Bank, N.A., Subordinated    A1         A-        3,625,000     6.950        2028      None           3,190,953   3,216,644
     Debentures

   6 Sears Roebuck Acceptance        A3         A-        3,625,000     6.500        2028      None           2,940,588   2,892,823
     Corporation, Notes

   7 Swiss Bank Corporation-NY,      Aa2        AA        3,625,000     7.750        2026      None           3,563,610   3,625,290
     Subordinated Debentures

   8 Dana Corporation, Notes         Baa1       BBB+      3,625,000     7.000        2029      None           3,178,985   3,134,501

   9 Ford Motor Company, Notes       A2         A         3,625,000     7.450        2031      None           3,499,577   3,369,438

  10 General Motors Corporation,     A2         A         3,625,000     7.400        2025      None           3,479,685   3,496,639
     Debentures

  11 Phillips Petroleum Company,     Baa2       BBB       3,625,000     7.000        2029      None           3,250,779   3,251,553
     Debentures

  12 Dayton Hudson Corporation,      A2         A         3,625,000     6.650        2028      None           3,155,074   3,169,918
     Debentures

  13 United States Treasury Notes    Aaa        AAA         551,000     5.500        2000      None             551,712     549,278
     (4)
                                                            551,000     6.125        2001      None             549,736     549,795

                                                         ----------                                          ----------  ----------
     TOTAL                                              $44,602,000                                         $40,590,438 $40,521,314
                                                         ==========                                          ==========  ==========
</TABLE>

                             See Notes to Portfolio.


                                     D - 7.
<PAGE>

     CORPORATE INCOME FUND,
     MONTHLY PAYMENT SERIES - 502,
     DEFINED ASSET FUNDS

     NOTES TO PORTFOLIO
     As of Augsut 31, 2000

    (1)   "NR", if applicable, indicates that this security is not currently
          rated by the indicated rating service. These ratings have been
          furnished by the Evaluator but not confirmed with the rating agencies.

    (2)   See Notes to Financial Statements.

    (3)   Optional redemption provisions, which may be exercised in whole or in
          part, are initially at prices of par plus a premium, then subsequently
          at prices declining to par. Certain securities may provide for
          redemption at par prior or in addition to any optional or mandatory
          redemption dates or maturity, for example, through the operation of a
          maintenance and replacement fund, if proceeds are not able to be used
          as contemplated, the project is condemned or sold or the project is
          destroyed and insurance proceeds are used to redeem the securities.
          Many of the securities are also subject to mandatory sinking fund
          redemption commencing on dates which may be prior to the date on which
          securities may be optionally redeemed. Sinking fund redemptions are at
          par and redeem only part of the issue. Some of the securities have
          mandatory sinking funds which contain optional provisions permitting
          the issuer to increase the principal amount of securities called on a
          mandatory redemption date. The sinking fund redemptions with optional
          provisions may, and optional refunding redemptions generally will,
          occur at times when the redeemed securities have an offering side
          evaluation which represents a premium over par. To the extent that the
          securities were acquired at a price higher than the redemption price,
          this will represent a loss of capital when compared with the Public
          Offering Price of the Units when acquired. Distributions will
          generally be reduced by the amount of the income which would otherwise
          have been paid with respect to redeemed securities and there will be
          distributed to Holders any principal amount and premium received on
          such redemption after satisfying any redemption requests for Units
          received by the Fund. The estimated current return may be affected by
          redemptions.

    (4) These bonds have been segregated to fund the deferred sales charges.


                                     D - 8.
<PAGE>
              Defined
            Asset Funds-Registered Trademark-

<TABLE>
<S>                                      <C>
HAVE QUESTIONS ?                         CORPORATE INCOME FUND
Request the most                         MONTHLY PAYMENT SERIES--502
recent free Information                  (A Unit Investment Trust)
Supplement that gives more               ---------------------------------------
details about the Fund,                  This Prospectus does not contain
by calling:                              complete information about the
The Chase Manhattan Bank                 investment company filed with the
1-800-323-1508                           Securities and Exchange Commission in
                                         Washington, D.C. under the:
                                         - Securities Act of 1933 (file no.
                                         333-70851) and
                                         - Investment Company Act of 1940 (file
                                         no. 811-2295).
                                         TO OBTAIN COPIES AT PRESCRIBED RATES--
                                         WRITE: Public Reference Section of the
                                         Commission
                                         450 Fifth Street, N.W., Washington,
                                         D.C. 20549-6009
                                         CALL: 1-800-SEC-0330.
                                         VISIT: http://www.sec.gov.
                                         ---------------------------------------
                                         No person is authorized to give any
                                         information or representations about
                                         this Fund not contained in this
                                         Prospectus or the Information
                                         Supplement, and you should not rely on
                                         any other information.
                                         ---------------------------------------
                                         When units of this Fund are no longer
                                         available, this Prospectus may be used
                                         as a preliminary prospectus for a
                                         future series, but some of the
                                         information in this Prospectus will be
                                         changed for that series.
                                         UNITS OF ANY FUTURE SERIES MAY NOT BE
                                         SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
                                         UNTIL THAT SERIES HAS BECOME EFFECTIVE
                                         WITH THE SECURITIES AND EXCHANGE
                                         COMMISSION. NO UNITS CAN BE SOLD IN ANY
                                         STATE WHERE A SALE WOULD BE ILLEGAL.
                                                                 100193RR--12/00
</TABLE>
<PAGE>
                             CORPORATE INCOME FUND
                              DEFINED ASSET FUNDS
                       CONTENTS OF REGISTRATION STATEMENT

    This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:

    The facing sheet of Form S-6.

    The cross-reference sheet (incorporated by reference to the Cross-Reference
Sheet to the Registration Statement on Form S-6 of Defined Asset Funds Municipal
Insured Series, 1933 Act File No. 33-54565).

    The Prospectus.

    The Signatures.

The following exhibits:

    1.1.1 -- Form of Standard Terms and Conditions of Trust Effective as of
            October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
            Registration Statement of Municipal Investment Trust Fund,
            Multistate Series--48, 1933 Act File No. 33-50247).

    1.11.1-- Merrill Lynch Code of Ethics (incorporated by reference to Exhibit
            1.11.1 to Post Effective Amendment No. 6 to the Registration
            Statement of Corporate Income Fund, Monthly Payment Series 315, 1933
            Act File No. 33-49755).

    1.11.2-- Corporate Income Fund Code of Ethics (incorporated by reference to
            Exhibit 1.11.2 to Post Effective Amendment No. 6 to the Registration
            Statement of Corporate Income Fund, Monthly Payment Series 315, 1933
            Act File No. 33-49755).

    4.1  --Consent of the Evaluator.

    5.1  --Consent of independent accountants.

    9.1  -- Information Supplement (incorporated by reference to Exhibit 9.1 to
           Amendment No. 1 to the Registration Statement of Corporate Income
           Fund, Intermediate Term Series--54, 1933 Act File No. 33-57973).

                                      R-1
<PAGE>
                             CORPORATE INCOME FUND
                          MONTHLY PAYMENT SERIES--502
                              DEFINED ASSET FUNDS

                                   SIGNATURES

    PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
CORPORATE INCOME FUND, MONTHLY PAYMENT SERIES--502, DEFINED ASSET FUNDS,
CERTIFIES THAT IT MEETS ALL OF THE REQUIREMENTS FOR EFFECTIVENESS OF THIS
REGISTRATION STATEMENT PURSUANT TO RULE 485(B) UNDER THE SECURITIES ACT OF 1933
AND HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 13TH DAY OF
DECEMBER, 2000.

               SIGNATURES APPEAR ON PAGES R-3, R-4, R-5 AND R-6.

    A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.

    A majority of the members of the Board of Directors of Salomon Smith Barney
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.

    A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.

    A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.

                                      R-2
<PAGE>
               MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
                                   DEPOSITOR

<TABLE>
<S>                                       <C>
By the following persons, who constitute  Powers of Attorney have been filed
  a majority of                             under
  the Board of Directors of Merrill         Form SE and the following 1933 Act
  Lynch, Pierce,                            File
  Fenner & Smith Incorporated:              Number: 333-70593
</TABLE>

     GEORGE A. SCHIEREN
     JOHN L. STEFFENS

     By JAY M. FIFE
       (As authorized signatory for Merrill Lynch, Pierce,
       Fenner & Smith Incorporated and
       Attorney-in-fact for the persons listed above)

                                      R-3
<PAGE>
                           SALOMON SMITH BARNEY INC.
                                   DEPOSITOR

<TABLE>
<S>                                                           <C>
By the following persons, who constitute a majority of        Powers of Attorney
  the Board of Directors of Salomon Smith Barney Inc.:          have been filed
                                                                under the 1933 Act
                                                                File Numbers:
                                                                333-63417 and
                                                                333-63033
</TABLE>

     MICHAEL A. CARPENTER
     DERYCK C. MAUGHAN

     By GINA LEMON
       (As authorized signatory for
       Salomon Smith Barney Inc. and
       Attorney-in-fact for the persons listed above)

                                      R-4
<PAGE>
                            PAINEWEBBER INCORPORATED
                                   DEPOSITOR

<TABLE>
<S>                                       <C>
By the following persons, who constitute  Powers of Attorney have been filed
  the Board of Directors of PaineWebber     under
  Incorporated:                             the following 1933 Act File
                                            Number: 33-55073
</TABLE>

     MARGO N. ALEXANDER
     TERRY L. ATKINSON
     BRIAN M. BAREFOOT
     STEVEN P. BAUM
     MICHAEL CULP
     REGINA A. DOLAN
     JOSEPH J. GRANO, JR.
     EDWARD M. KERSCHNER
     JAMES P. MacGILVRAY
     DONALD B. MARRON
     ROBERT H. SILVER
     MARK B. SUTTON

     By ROBERT E. HOLLEY
       (As authorized signatory for
       PaineWebber Incorporated
       and Attorney-in-fact for the persons listed above)

                                      R-5
<PAGE>
                           DEAN WITTER REYNOLDS INC.
                                   DEPOSITOR

<TABLE>
<S>                                       <C>
By the following persons, who constitute  Powers of Attorney have been filed
  a majority of                             under Form SE and the following 1933
  the Board of Directors of Dean Witter     Act File Numbers: 33-17085,
  Reynolds Inc.:                            333-13039, 333-47553, 333-89009 and
                                            333-39302.
</TABLE>

     BRUCE F. ALONSO
     RICHARD M. DeMARTINI
     RAYMOND J. DROP
     JAMES F. HIGGINS
     DONALD G. KEMPF, JR.
     JOHN J. MACK
     MITCHELL M. MERIN
     STEPHEN R. MILLER
     PHILIP J. PURCELL
     JOHN H. SCHAEFER
     THOMAS C. SCHNEIDER
     ALAN A. SCHRODER
     ROBERT G. SCOTT

     By MICHAEL D. BROWNE
       (As authorized signatory for
       Dean Witter Reynolds Inc.
       and Attorney-in-fact for the persons listed above)

                                      R-6



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