Creasy plc needs to raise €20 million and is considering two different instruments that could be issued:

(i) A 7% debenture with a par value of €20 million, repayable at par in five years. Interest is paid annually in arrears.

(ii) A 5% convertible debenture with a par value of €20 million, repayable at par in five years or convertible into 5 million €1 shares. Interest is paid annually in arrears.

Required:

Comment on the effect on the statement of comprehensive income and the statement of financial position of issuing these different instruments.