Chi Ltd issues loan notes of 95,000 on 1 January 2024. Redemption is to take place on
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Question:
Chi Ltd issues loan notes of €95,000 on 1 January 2024. Redemption is to take place on equal terms, four years later. The company decides to put aside an equal amount to be invested at 5% which will provide €95,000 on maturity. Tables show that €0.232012 invested annually will produce €1 in four years’ time.
Required:
- Calculate the annual sinking fund investment.
- Record the journal entries for the investment each year.
- Prepare the loan-notes ledger account.
- Show the effect on the equity section of the balance sheet.
Related Book For
Frank Woods Business Accounting Volume 2
ISBN: 9780273693109
10th Edition
Authors: Frank Wood, Alan Sangster
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