Psi Corporation issues loan notes of £105,000 on 1 January 2025. Redemption is to take place...
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Psi Corporation issues loan notes of £105,000 on 1 January 2025. Redemption is to take place on equal terms, three years later. The company decides to put aside an equal amount to be invested at 5% which will provide £105,000 on maturity. Tables show that £0.292102 invested annually will produce £1 in three years’ time.
Required: Prepare the following in table format: (a) Loan-note redemption reserve account. (b) Loan-note sinking fund investment account. (c) Loan-notes account. (d) Extracts from the equity section of the balance sheet.
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