Loan notes of £48,000 are issued on 1 January 2017. Redemption is to take place, on equal terms, four years later. The company decides to put aside an equal amount to be invested at 6% which will provide £48,000 on maturity. Tables show that £0.22857142 invested annually will produce £1 in four years’ time.
You are required to show:
(a) Loan-note redemption reserve account
(b) Loan-note sinking fund investment account
(c) Loan-notes account
(d) Retained profits account extracts.