Debentures of 30,000 are issued on 1 January 20X3. Redemption is to take place, on equal terms,

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Debentures of £30,000 are issued on 1 January 20X3. Redemption is to take place, on equal terms, four years later. The company decides to put aside an equal amount to be invested at 5 per cent which will provide £30,000 on maturity. Tables show that £0.232012 invested annually will produce £1 in four years’ time.


You are required to show:

(a) Debenture redemption reserve account

(b) Debenture sinking fund investment account

(c) Debentures account

(d) Profit and loss account extracts.

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