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The following information relates to Epsilon Ltd : On 1 April 2026 the company had 600,000 5% debentures in issue. The interest on these debentures
- The following information relates to Epsilon Ltd:
- On 1 April 2026 the company had £600,000 5% debentures in issue. The interest on these debentures is paid on 30 September and 31 March.
- The debenture redemption fund balance (relating to the redemption of these debentures) at 1 April 2026 was £45,000. This fund is being built up by annual appropriations of £7,000. The annual appropriation (along with any dividends or interest on the investments) is invested on 31 March.
- Debenture redemption fund investments can be realized at any time to purchase debentures in the open market either at or below par value. Such debentures are then canceled.
- On 31 December 2026, £35,000 of investments were sold for £39,900, and the proceeds were used to purchase debentures with a par value of £42,000.
- Dividends and interest on redemption fund investments during the year to 31 March 2027 amounted to £5,600.
- The cost of dealing with the above matters and any taxation effects may be ignored.
Required: Write up the following ledger accounts for the year to 31 March 2027: (a) 5% debentures; (b) debenture redemption fund; (c) debenture redemption fund investments; (d) debenture redemption; and (e) debenture interest.
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