=+3. lIKarnatic Ltd. has issued £500,000 of Debentures at par on the condition that it opens up and invests a Sinking Fund. During the life of the fund the annual contributions have amounted to £485,000 and interest and dividends on the investments have totalled £9,975. Under the terms of the issue £50,000 of Debentures have been purchased on the open market for £47,860, which was raised by selling investments (costing

£37,556) for that amount.