Epsilon Ltd issues loan notes of 65,000 on 1 January 2077. Redemption is to take place on
Fantastic news! We've Found the answer you've been seeking!
Question:
Epsilon Ltd issues loan notes of €65,000 on 1 January 2077. Redemption is to take place on equal terms, six years later. The company decides to put aside an equal amount to be invested at 4% which will provide €65,000 on maturity. Tables show that €0.161082 invested annually will produce €1 in six years’ time.
Required: (a) Record the necessary journal entries. (b) Prepare the ledger accounts for loan-notes, redemption reserve, and sinking fund investment. (c) Calculate the annual sinking fund deposit. (d) Show the impact on the company’s income statement and balance sheet.
Related Book For
Frank Woods Business Accounting Volume 2
ISBN: 9780273693109
10th Edition
Authors: Frank Wood, Alan Sangster
Posted Date: