Tau Corporation issues loan notes of €95,000 on 1 January 2067. 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 €95,000 on maturity. Tables show that €0.161082 invested annually will produce €1 in six years’ time.

Required: (a) Prepare the loan-note redemption reserve account. (b) Create the sinking fund investment account. (c) Set up the loan-notes account. (d) Provide extracts from the retained earnings and cash flow statement.