On 1 October year 1, RPS plc issued one million £1 5% redeemable preference shares. The shares were issued at a discount of £50,000 and are due to be redeemed on 30 September Year 5. Dividends are paid on 30 September each year.

Required:
Show the accounting treatment of the preference shares throughout the life-span of the instrument calculating the finance cost to be charged to the income statement in each period.