Rho Industries issues loan notes of £110,000 on 1 January 2019. Redemption is to take place...
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Accounting
Rho Industries issues loan notes of £110,000 on 1 January 2019. 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 £110,000 on maturity. Tables show that £0.185093 invested annually will produce £1 in five years’ time.
Required: Prepare:
- The loan-note redemption reserve account.
- The sinking fund investment account.
- The loan-notes account.
- Extracts from the cash flow statement and retained earnings.
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