Kappa Corporation issues loan notes of £85,000 on 1 January 2036. Redemption is to take place on equal terms, six years later. The company decides to put aside an equal amount to be invested at 5.5% which will provide £85,000 on maturity. Tables show that £0.147061 invested annually will produce £1 in six years’ time.

Required: Create:

1. The loan-note redemption reserve ledger.
2. The sinking fund investment ledger.
3. The loan-notes payable ledger.

Notes to the financial statements explaining the sinking fund and redemption process.