Upsilon Ltd issues loan notes of 75,000 on 1 January 2022. Redemption is to take place on
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Upsilon Ltd issues loan notes of £75,000 on 1 January 2022. Redemption is to take place on equal terms, four years later. The company decides to put aside an equal amount to be invested at 3.5% which will provide £75,000 on maturity. Tables show that £0.238227 invested annually will produce £1 in four 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.
Related Book For
Frank Woods Business Accounting Volume 2
ISBN: 9780273693109
10th Edition
Authors: Frank Wood, Alan Sangster
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