$(2)$ A company issues $4\%$ convertible bonds at their nominal value of $$5$ million

Each bond is convertible at any time up to maturity into $400$ ordinary shares. Alternatively the bonds will be redeemed at par after $3$ years.

The market rate applicable to non$-$convertible bonds is $6\%$

The present value of $$1$ payable at the end of year, based on rates of $4\%$ and $6\%$ are as follows:

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$4\%$

$69$

$0\mathrm{.}96$

$094$

$2$

$0\mathrm{.}92$

$0\mathrm{.}89$

$0\mathrm{.}89$

$084$

What amounts will be shown as a financial liability and as equity when the convertible bonds are issued?

What amounts will be shown in the statement of profit or loss and statement of financial position for years $1-3?$