DEFINED ASSET FUNDS CORP INC FD CASH OR ACCRETION BD SER 1
497, 1994-09-08
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<PAGE>
DEFINED
ASSET FUNDSSM
 
CORPORATE INCOME
FUND
 
- ------------------------------------------------------------
CASH OR ACCRETION BOND
SERIES--1
(A UNIT INVESTMENT TRUST)
 
PROSPECTUS, PART A
DATED SEPTEMBER 2, 1994
 
SPONSORS:
Merrill Lynch,
Pierce, Fenner & Smith Inc.
Smith Barney Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Dean Witter Reynolds Inc.
 
This Defined Fund's objective is to provide a substantial level of safety
through investment in a portfolio consisting primarily of long-term compound
interest corporate bonds that are collateralized (the 'Compound Interest
Bonds'). There is no assurance that this objective will be met because it is
subject to the continuing ability of issuers of the Debt Obligations to meet
their principal and interest requirements. Furthermore, the market value of the
underlying Securities, and therefore the value of the Units, will flucutate with
changes in interest rates and other factors. The Securities were issued after
July 18, 1984, as a result of which the interest income (including original
issue discount) will be exempt from U.S. Federal income taxes, including
withholding taxes, for many foreign Holders (see Taxes in Part B).
The collateral backing the Compound Interest Bonds is primarily composed of
mortgage-backed Securities of the GNMA modified pass-through type ('GNMA
Certificates' or 'Ginnie Maes') fully guaranteed as to the payment of principal
and interest by GNMA. The guaranty obligation of GNMA with respect to the GNMA
Certificates will be backed by the full faith and credit of the United States,
but GNMA does not guarantee payment on the Bonds or on the Units of the Fund, as
such. The Fund is also designed for IRA accounts, Keogh plans and other
tax-deferred retirement programs. Units of the Fund are rated AAA by Standard &
Poor's.
                        MINIMUM PURCHASE IN INDIVIDUAL TRANSACTIONS: 1,000 UNITS
- ------------------------------------------------------------------------
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------
 
NOTE: PART A OF THIS PROSPECTUS MAY NOT BE DISTRIBUTED
UNLESS ACCOMPANIED BY DEFINED ASSET FUNDS--CORPORATE INCOME FUND PROSPECTUS,
PART B.
 
This Prospectus consists of two parts. The first includes an Investment Summary
and certified financial statements of the Fund, including the related securities
portfolio; the second contains a general summary of the Fund.
- ------------------------------------------------------------------------
Read and retain both parts of this Prospectus for future reference.
<PAGE>
 
DEFINED ASSET FUNDSSM is America's oldest and largest family of unit investment
trusts with over $90 billion sponsored since 1970. Each Defined Fund is a
portfolio of preselected securities. The portfolio is divided into 'units'
representing equal shares of the underlying assets. Each unit receives an equal
share of income and principal distributions.
 
With Defined Asset Funds you know in advance what you are investing in and that
changes in the portfolio are limited. Most defined bond funds pay interest
monthly and repay principal as bonds are called, redeemed, sold or as they
mature. Defined equity funds offer preselected stock portfolios with defined
termination dates.
 
Your financial advisor can help you select a Defined Fund to meet your personal
investment objectives. Our size and market presence enable us to offer a wide
variety of investments. Defined Funds are available in the following types of
securities: municipal bonds, corporate bonds, government bonds, utility stocks,
growth stocks, even international securities denominated in foreign currencies.
 
Termination dates are as short as one year or as long as 30 years. Special funds
are available for investors seeking extra features: insured funds, double and
triple tax-free funds, and funds with 'laddered maturities' to help protect
against rising interest rates. Defined Funds are offered by prospectus only.
 
- --------------------------------------------------------------------------------
CONTENTS
 

Investment Summary..........................................                 A-3
Accountants' Opinion Relating to the Fund...................                 D-1
Statement of Condition......................................                 D-2
Portfolio...................................................                 D-6

 
                                      A-2
<PAGE>
DEFINED ASSET FUNDS--CORPORATE INCOME FUND, CASH OR ACCRETION BOND SERIES--1
INVESTMENT SUMMARY
AS OF MAY 31, 1994, THE EVALUATION DATE
 

PRINCIPAL AMOUNT OF SECURITIES(a)........................$          3,671,545
NUMBER OF UNITS..........................................           9,964,701
FACE AMOUNT OF SECURITIES PER UNIT (TIMES 1,000).........$             368.45
FRACTIONAL UNDIVIDED INTEREST IN FUND REPRESENTED BY EACH
  UNIT...................................................         1/9,964,701st
PUBLIC OFFERING PRICE PER 1,000 UNITS(b)
     Aggregate bid side evaluation of Securities.........$          3,775,789
                                                         --------------------
     Divided by Number of Units (times 1,000)............$             378.92
     Plus sales charge of 3.50% of Public Offering Price
       (3.627% of net amount invested)                                  13.74
                                                         --------------------
     Public Offering Price per 1,000 Units...............$             392.66
                                                                   (plus cash
                                                              adjustments and
                                                         accrued interest)(c)
SPONSORS' REPURCHASE PRICE AND REDEMPTION PRICE PER 1,000
  UNITS..................................................$             378.92
  (aggregate bid side evaluation of Securities) ($13.74            (plus cash
     less than Public Offering Price per 1,000 Units)         adjustments and
                                                         accrued interest)(c)
CALCULATION OF ESTIMATED NET ANNUAL INTEREST RATE PER
  1,000 UNITS (BASED ON FACE AMOUNT PER 1,000 UNITS)
     Annual interest rate per 1,000 Units................              11.189%
     Less estimated annual expenses per 1,000 Units
       ($3.58) expressed as a percentage.................                .971%
                                                         --------------------
     Estimated net annual interest rate per 1,000
       Units.............................................              10.218%
                                                         --------------------
                                                         --------------------

 
RECORD DAY FOR PRINCIPAL AND INTEREST
  DISTRIBUTIONS
    The 10th day of each month.
PRINCIPAL AND INTEREST DISTRIBUTIONS
    The 25th of each month.
MINIMUM CAPITAL DISTRIBUTION
    No distribution need be made from Capital Account if balance is less than
    $5.00 per 1,000 Units.
TRUSTEE'S ANNUAL FEE AND EXPENSES(d)
    $3.58 per 1,000 Units (see Expenses and Charges in Part B).
PORTFOLIO SUPERVISION FEE(e)
    Maximum of $0.35 per 1,000 original Principal Amount of underlying Compound
    Interest Bonds (see Expenses and Charges in Part B).
EVALUATOR'S FEE FOR EACH EVALUATION
    Maximum of $14 (see Expenses and Charges in Part B).
EVALUATION TIME
    3:30 P.M. New York Time
MINIMUM VALUE OF FUND
    Trust may be terminated if value of Fund is less than 40% of the original
    Principal Amount of Fund Securities on the date of their deposit. As of the
    Evaluation Date, the value of the Fund is 16% of the original Principal
    Amount of Fund Securities on the date of their deposit.
 
- ------------------------------
       (a)On the initial date of Deposit (September 20, 1985) the Principal
          Amount of Securities in the Fund was $22,386,510. Cost of Securities
          is set forth under Portfolio.
       (b)These figures assume a purchase of 1,000 Units. The price of a single
          Unit, or any multiple thereof, is calculated simply by dividing the
          Public Offering Price per 1,000 Units, above, by 1,000, and
          multiplying by the number of Units. The sales charge will be reduced
          on a graduated scale in the case of quantity purchases (see Public
          Offering Price in Part B). The resulting reduction in the Public
          Offering Price will increase the effective return on a Unit.
       (c)For Units purchased or redeemed on the Evaluation Date, accrued
          interest is approximately equal to the undistributed net investment
          income of the Fund (see Statement of Condition on p. D-2) divided by
          the number of outstanding Units, plus accrued interest per Unit to the
          expected date of settlement (5 business days after purchase or
          redemption). The amount of the cash adjustment which is added is equal
          to the cash per Unit held in the Capital Account not allocated to the
          purchase of specific Securities (see Public Sale of Units--Public
          Offering Price and Redemption in Part B).
       (d)The Trustee receives annually for its services as Trustee $0.95 per
          $1,000 original Principal Amount of Compound Interest Bonds. The
          Trustee's Annual Fee and Expenses also includes the Portfolio
          Supervision Fee and the Evaluator's Fee set forth herein.
       (e)The Sponsors also may be reimbursed for their costs of bookkeeping and
          administrative services to the Fund. Portfolio supervision fees
          deducted in excess of portfolio supervision expenses may be used for
          this reimbursement. Additional deductions for this purpose are
          currently estimated not to exceed an annual rate of $0.10 per 1,000
          Units.
 
                                      A-3
<PAGE>
 
DEFINED ASSET FUNDS--CORPORATE INCOME FUND, CASH OR ACCRETION BOND SERIES--1
INVESTMENT SUMMARY AS OF THE EVALUATION DATE (CONTINUED)
 

NUMBER OF ISSUES IN PORTFOLIO...............................                5
RANGE OF MATURITIES.................................................2010-2015
NUMBER OF COMPOUND INTEREST BONDS...........................                4
NUMBER OF U.S. TREASURY INTEREST BEARING BONDS..............                1
PERCENTAGE OF ACCRETED PRINCIPAL AMOUNT OF PORTFOLIO
  REPRESENTED BY EACH ISSUER(c) OF COMPOUND INTEREST BONDS:
  Centex Acceptance Corporation.............................                3%
  Collateralized Mortgage Securities Corporation............               22%
  General Homes Finance Corporation.........................               12%
  Colonial Savings & Loan Association.......................               53%
STANDARD & POOR'S
  RATING ON UNITS OF THE FUND(a) ........................................ AAA
PERCENT OF ACCRETED PRINCIPAL AMOUNT OF PORTFOLIO COMPRISED
  OF:(b)
  GNMA-COLLATERALIZED BONDS:
  12.25% Compound Interest Bond (stated maturity 12/1/14)...                3%
  11.125% Compound Interest Bond (stated maturity 6/1/10)...               53%
  11.45% Compound Interest Bond (stated maturity 9/1/15)....               22%
  11.50% Compound Interest Bond (stated maturity 6/1/15)....               12%

 
     DISTRIBUTIONS--Interest payments have commenced on the Compound-Interest
Bonds; interest and principal are paid semi-annually to the Fund and distributed
monthly to Holders.
 
- ------------------------------
       (a) See Description of Ratings in Part B.
       (b) See Risk Factors--Cash or Accretion Bond Series, Select Series and
GNMA-Collateralized Bond Series in Part B.
       (c) All of the issuers of the Compound Interest Bonds are limited purpose
           corporations organized solely for the purpose of issuing bonds
           collateralized by mortgage-backed securities. See Risk Factors--Cash
           or Accretion Bond Series, Select Series and GNMA-Collateralized Bond
           Series--Limited Assets and Limited Liability in Part B. The
           collateral security for each issue will serve as collateral only for
        that issue.
 
                                      A-4
<PAGE>

     DEFINED ASSET FUNDS - CORPORATE INCOME FUND
     CASH OR ACCRETION BOND SERIES - 1

     REPORT OF INDEPENDENT ACCOUNTANTS


     The Sponsors, Co-Trustees and Holders
     of Defined Asset Funds - Corporate Income Fund,
     Cash or Accretion Bond Series - 1:

     We have audited the accompanying statement of condition of Defined Asset
     Funds - Corporate Income Fund, Cash or Accretion Bond Series - 1,
     including the portfolio, as of May 31, 1994 and the related statements of
     operations and of changes in net assets for the period March 1 to May 31,
     1994 and the years ended February 28, 1994 and 1993 and February 29, 1992.
     These financial statements are the responsibility of the Co-Trustees.  Our
     responsibility is to express an opinion on these financial statements
     based on our audits.

     We conducted our audits in accordance with generally accepted auditing
     standards.  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 May 31, 1994, as shown in such portfolio,
     were confirmed to us by Investors Bank & Trust Company, a Co-Trustee.  An
     audit also includes assessing the accounting principles used and
     significant estimates made by the Co-Trustees, as well as evaluating the
     overall financial statement presentation.  We believe that our audits
     provide 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 Defined Asset Funds -
     Corporate Income Fund, Cash or Accretion Bond Series - 1 at May 31, 1994
     and the results of its operations and changes in its net assets for the
     above-stated periods in conformity with generally accepted accounting
     principles.



     DELOITTE & TOUCHE LLP

     NEW YORK, N.Y.
     August 11, 1994


































                                   D -  1
<PAGE>

     DEFINED ASSET FUNDS - CORPORATE INCOME FUND
     CASH OR ACCRETION BOND SERIES - 1


     STATEMENT OF CONDITION
     As of May 31, 1994
<TABLE>
<S>                                                                                                  <C>           <C>

     TRUST PROPERTY:
       INVESTMENT IN MARKETABLE SECURITIES - AT VALUE (COST $3,450,714) (NOTE 1).................................. $   3,775,789
       CASH INCOME................................................................................................        71,414
       CASH PRINCIPAL.............................................................................................            99
       ACCRUED INTEREST RECEIVABLE................................................................................       116,187
                                                                                                                   -------------
       TOTAL TRUST PROPERTY.......................................................................................     3,963,489

     LESS LIABILITIES:
       REDEMPTIONS PAYABLE.......................................................................... $      79,936
       ACCRUED EXPENSES.............................................................................         1,277
                                                                                                     -------------
       TOTAL LIABILITIES............................................................................                      81,213
                                                                                                                   -------------

     NET ASSETS, REPRESENTED BY:
       9,964,701  UNITS OF FRACTIONAL UNDIVIDED INTEREST OUTSTANDING (NOTE 3).......................     3,775,888
       UNDISTRIBUTED NET INVESTMENT INCOME..........................................................       106,388
                                                                                                     -------------
     NET ASSETS.....................................................................................               $   3,882,276
                                                                                                                   =============
     UNITS OUTSTANDING............................................................................................     9,964,701
                                                                                                                   =============
     NET ASSET VALUE PER UNIT..................................................................................... $     0.38960
                                                                                                                   =============
</TABLE>

                                 See Notes To Financial Statements.










































                                   D -  2
<PAGE>

     DEFINED ASSET FUNDS - CORPORATE INCOME FUND
     CASH OR ACCRETION BOND SERIES - 1


     STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                         March 1,
                                                                           1994
                                                                            to         Year Ended     Year Ended     Year Ended
                                                                          May 31,     February 28,   February 28,   February 29,
                                                                           1994           1994           1993           1992
                                                                           ----           ----           ----           ----
<S>                                                                   <C>            <C>            <C>            <C>

     INVESTMENT INCOME:
       ACCRETED INTEREST ON COLLATERALIZED BONDS..................... $           0  $           0  $     445,260  $     492,288
       OTHER INTEREST INCOME.........................................       102,722        600,404        435,312        781,877
       CO-TRUSTEES' FEES AND EXPENSES................................        (7,521)       (30,853)        (2,807)       (34,532)
       SPONSORS' FEES................................................        (1,330)        (7,466)        (9,696)        (5,509)
                                                                      -------------  -------------  -------------  -------------
       NET INVESTMENT INCOME.........................................        93,871        562,085        868,069      1,234,124











                                                                      -------------  -------------  -------------  -------------

     REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
       NET REALIZED GAIN ON SECURITIES SOLD OR REDEEMED..............         7,838         49,796        181,405        152,859
       UNREALIZED DEPRECIATION OF INVESTMENTS........................       (70,260)      (196,368)      (188,865)      (143,989)
                                                                      -------------  -------------  -------------  -------------
       NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........       (62,422)      (146,572)        (7,460)         8,870
                                                                      -------------  -------------  -------------  -------------
     NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ $      31,449  $     415,513  $     860,609  $   1,242,994
                                                                      =============  =============  =============  =============
</TABLE>

                                 See Notes to Financial Statements.

































                                   D -  3
<PAGE>

     DEFINED ASSET FUNDS - CORPORATE INCOME FUND
     CASH OR ACCRETION BOND SERIES - 1


     STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>











<CAPTION>
                                                                         March 1,
                                                                           1994
                                                                            to         Year Ended     Year Ended     Year Ended
                                                                          May 31,     February 28,   February 28,   February 29,
                                                                           1994           1994           1993           1992
                                                                           ----           ----           ----           ----
<S>                                                                   <C>            <C>            <C>            <C>

     OPERATIONS:
       NET INVESTMENT INCOME......................................... $      93,871  $     562,085  $     868,069  $   1,234,124
       NET REALIZED GAIN ON SECURITIES SOLD OR REDEEMED..............         7,838         49,796        181,405        152,859
       UNREALIZED DEPRECIATION OF INVESTMENTS........................       (70,260)      (196,368)      (188,865)      (143,989)
                                                                      -------------  -------------  -------------  -------------
       NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..........        31,449        415,513        860,609      1,242,994
                                                                      -------------  -------------  -------------  -------------

     DISTRIBUTIONS TO HOLDERS: (NOTE 2)
       INCOME........................................................       (98,551)      (545,108)      (452,231)      (493,944)
       PRINCIPAL.....................................................      (595,391)    (2,452,018)    (1,618,674)    (1,297,472)
                                                                      -------------  -------------  -------------  -------------
       TOTAL DISTRIBUTIONS...........................................      (693,942)    (2,997,126)    (2,070,905)    (1,791,416)
                                                                      -------------  -------------  -------------  -------------

     UNIT TRANSACTIONS:
       REDEMPTION AMOUNTS - PRINCIPAL................................             0       (356,345)    (1,770,899)    (2,087,643)
                                                                      -------------  -------------  -------------  -------------
       TOTAL UNIT TRANSACTIONS.......................................             0       (356,345)    (1,770,899)    (2,087,643)
                                                                      -------------  -------------  -------------  -------------


     NET DECREASE IN NET ASSETS......................................      (662,493)    (2,937,958)    (2,981,195)    (2,636,065)
     NET ASSETS AT BEGINNING OF PERIOD...............................     4,544,769      7,482,727     10,463,922     13,099,987
                                                                      -------------  -------------  -------------  -------------
     NET ASSETS AT END OF PERIOD..................................... $   3,882,276  $   4,544,769  $   7,482,727  $  10,463,922
                                                                      =============  =============  =============  =============

     PER UNIT:
       INCOME DISTRIBUTIONS DURING PERIOD............................ $     0.00989  $     0.05422  $     0.04000  $     0.03696
                                                                      =============  =============  =============  =============
       PRINCIPAL DISTRIBUTIONS DURING PERIOD......................... $     0.05975  $     0.24418  $     0.14323  $     0.09662
                                                                      =============  =============  =============  =============
       NET ASSET VALUE AT END OF PERIOD.............................. $     0.38960  $     0.45609  $     0.73081  $     0.86638
                                                                      =============  =============  =============  =============

     TRUST UNITS:
       REDEEMED DURING PERIOD........................................             0        424,000      2,278,000      2,352,988
                                                                      =============  =============  =============  =============
       ISSUED DURING PERIOD..........................................             0        149,749        439,255        575,370
                                                                      =============  =============  =============  =============
       OUTSTANDING AT END OF PERIOD..................................     9,964,701      9,964,701     10,238,952     12,077,697
                                                                      =============  =============  =============  =============
</TABLE>












                                 See Notes To Financial Statements.







                                   D -  4
<PAGE>

     DEFINED ASSET FUNDS - CORPORATE INCOME FUND
     CASH OR ACCRETION BOND SERIES - 1


     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 generally accepted accounting principles.

         (a)  Securities are stated at value as determined by the Evaluator
              based on bid side evaluations for the securities (see "Redemption
              - Computation of Redemption Price Per Unit" in this Prospectus,
              Part B).

         (b)  Subsequent to September 20, 1985, accrued interest is added to
              the principal and cost of the Collateralized Bonds in accordance
              with their terms.  On May 1 and November 1 of each year,
              additional units are issued ratebly to Holders based on one unit
              per one dollar of aggregate increase in the accreted principal
              amount of the compound interest bonds.

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

         (d)  Interest income is recorded as earned.

     2.  DISTRIBUTIONS

         The Fund is presently receiving distributions of principal or interest
         on all of its holdings of Collateralized Bonds in accordance with the
         terms of such Bonds.  Distributions are made by the Fund to its
         Holders based upon payments of principal and interest which are
         received on such Bonds.  For additional inofrmation, see "Risk Factors
         - Cash or Accretion Bond Series, Select Series and GNMA-Collateralized
         Bond Series" in this Prospectus, Part B.


     3.  NET CAPITAL

         Cost of 9,964,701 units outstanding.................... $   9,964,701











         Redemptions of units - net cost of 23,238,832 units
           redeemed less redemption amounts.....................      (568,650)
         Net realized gain on securities sold or redeemed.......     2,352,944
         Unrealized appreciation of investments.................       325,075
         Principal distributions................................    (8,298,182)
                                                                 -------------
         Net capital applicable to Holders...................... $   3,775,888
                                                                 =============

     4.  INCOME TAXES

         All Fund items of income received and accrued, expenses paid, and
         realized gains and losses on securities sold are attributable to the
         Holders, on a pro rata basis, for Federal income tax purposes in
         accordance with the grantor trust rules of the United States Internal
         Revenue Code.

         As May 31, 1994, the cost of the investment securities for Federal
         income tax purposes was approximately equivalent to the adjusted cost
         as shown in the Fund's portfolio.



                                   D -  5
<PAGE>
     DEFINED ASSET FUNDS - CORPORATE INCOME FUND
     CASH OR ACCRETION BOND SERIES - 1

     PORTFOLIO
     AS OF MAY 31, 1994
<TABLE>
<CAPTION>
                                                                                                               Optional
                   Portfolio No. and Title of            Rating of        Accreted                               Call
                           Securities                    Issues(1)       Principal    Coupon   Maturities       Date(3)
                           __________                    _________       _________    ______   __________       _______
<S>       <C>                                           <C>           <C>           <C>       <C>            <C>
     1    Centex Acceptance Corp GNMA-Collateralized        AAA       $    125,852   12.250%    12/01/14           -
           Bonds, Ser H-4
     2    Collateralized Mortgage Securities Corp           AAA            800,417   11.450     09/01/15       09/01/15
           Collateralized Mtg Obligations, Ser D-4
     3    Colonial Savings & Loan Assoc                     AAA          1,945,907   11.125     06/01/10       06/01/10
           Collateralized Mtg Obligations, Ser A-4
     4    General Homes Finance Corp                        AAA            449,369   11.500     06/01/15       06/01/15
           GNMA-Collateralized Obligations, Ser
           1985-1Z
     5    United States Treasury Bonds                      AAA            350,000   10.625     08/15/15           -
                                                                      ____________
     TOTAL                                                            $  3,671,545
                                                                      ============
</TABLE>
























































                                                            D -  6
<PAGE>
     DEFINED ASSET FUNDS - CORPORATE INCOME FUND
     CASH OR ACCRETION BOND SERIES - 1

     PORTFOLIO
     AS OF MAY 31, 1994
<TABLE>
<CAPTION>
                                                          Optional
                   Portfolio No. and Title of               Call           Adjusted
                           Securities                   Percentage(3)       Cost(2)      Value(2)
                           __________                   _____________       _______      ________
<S>       <C>                                           <C>            <C>           <C>











     1    Centex Acceptance Corp GNMA-Collateralized         20%       $    133,140  $    125,999
           Bonds, Ser H-4
     2    Collateralized Mortgage Securities Corp            10             755,624       799,836
           Collateralized Mtg Obligations, Ser D-4
     3    Colonial Savings & Loan Assoc                      50           1,782,204     1,939,838
           Collateralized Mtg Obligations, Ser A-4
     4    General Homes Finance Corp                         100            430,730       450,290
           GNMA-Collateralized Obligations, Ser
           1985-1Z
     5    United States Treasury Bonds                        -             349,016       459,826
                                                                       ____________  ____________
     TOTAL                                                             $  3,450,714  $  3,775,789
                                                                       ============  ============
</TABLE>

                              See Notes To Portfolio.













                                        D -  7
<PAGE>

     DEFINED ASSET FUNDS - CORPORATE INCOME FUND
     CASH OR ACCRETION BOND SERIES - 1


     NOTES TO PORTFOLIO
     AS OF MAY 31, 1994

     (1)  A description of the rating symbols and their meanings appears under
          "Description of Ratings" in this Prospectus, Part B.  Ratings are by
          Standard & Poor's.

     (2)  See Notes to Financial Statements.

     (3)  The Compound Interest Bonds were issued in series and each series is
          callable at the option of the Issuer, in whole (but not in part),
          without premium, at any time (i) on or after certain predetermined
          call dates or (ii) after the aggregate outstanding principal amount
          of the Compound Interest Bonds of such series declines to a stated
          percentage of the aggregate outstanding principal amount of the Bonds
          on their original issue date; for each issue, this percentage is
          stated in the column headed Optional Call Percentage.  Furthermore,
          principal on the Compound Interest Bonds may be prepaid to the extent
          that principal on the mortgages underlying the collateral is prepaid
          (see "Risk Factors - Cash or Accretion Bond Series, Select Series and
          GNMA - Collateralized Bond Series" in this Prospectus, Part B).






                                       D -  8














<PAGE>
 
                                                  DEFINED
                             ASSET FUNDSSM
 

SPONSORS:                               CORPORATE INCOME FUND
Merrill Lynch,                          Cash or Accretion Bond Series--1
Pierce, Fenner & Smith Inc.             (A Unit Investment Trust)
Unit Investment Trusts                  PROSPECTUS PART A
P.O. Box 9051                           This Prospectus does not contain all of
Princeton, N.J. 08543-9051              the information with respect to the
(609) 282-8500                          investment company set forth in its
Smith Barney Inc.                       registration statement and exhibits
Unit Trust Department                   relating thereto which have been filed
Two World Trade Center--101st Floor     with the Securities and Exchange
New York, N.Y. 10048                    Commission, Washington, D.C. under the
1-800-298-UNIT                          Securities Act of 1933 and the
PaineWebber Incorporated                Investment Company Act of 1940, and to
1200 Harbor Boulevard                   which reference is hereby made.
Weehawken, N.J. 07087                   No person is authorized to give any
(201) 902-3000                          information or to make any
Prudential Securities Incorporated      representations with respect to this
One Seaport Plaza                       investment company not contained in this
199 Water Street                        Prospectus; and any information or
New York, N.Y. 10292                    representation not contained herein must
(212) 776-1000                          not be relied upon as having been
Dean Witter Reynolds Inc.               authorized. This Prospectus does not
Two World Trade Center--59th Floor      constitute an offer to sell, or a
New York, N.Y. 10048                    solicitation of an offer to buy,
(212) 392-2222                          securities in any state to any person to
EVALUATOR:                              whom it is not lawful to make such offer
Kenny S&P Evaluation Services           in such state.
65 Broadway
New York, N.Y. 10006
INDEPENDENT ACCOUNTANTS:
Deloitte & Touche LLP
1633 Broadway
3rd Floor
New York, N.Y. 10019
CO-TRUSTEES:
The First National Bank of Chicago
Investors Bank & Trust Company
P.O. Box 1537
Boston, MA 02205-1537
1-800-338-6019

 
                                                      11700--9/94




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