Lambda Ltd issues loan notes of $150,000 on 1 January 2037. Redemption is to take place on equal terms, five years later. The company decides to put aside an equal amount to be invested at 4% which will provide $150,000 on maturity. Tables show that $0.185093 invested annually will produce $1 in five years’ time.

Required:

1. Annual sinking fund deposit calculation.
2. Yearly investment balance record.
3. Schedule for loan-note redemption.
4. Effect on the equity section of the balance sheet.