THIS QUESTION FROM COMPLEX FINANCIAL INSTRUMENTS PLEASE ANSWER THIS QUESTION 1. DETERMINE THE COMPLEX FINANCIAL INSTRUMENT SHOULD BE CLASSIFIED AS DEBT, EQUITY OR AS A COMPOUND FINANCIAL INSTRUMENT,

2 INTIAL AND SUBSEQUENT MEASUREMENT REQUIRMENTS I PLEASE ANSWER IN FULL DETAIL

Practice Problem 7 (15 minutes) Mega Corp., a publicly accountable enterprise, issued several complex financial instruments during 2020: Perpetual debt with a face value of $100,000 and a coupon rate of 5%. 10,000 preferred shares at par for $80 each. The shares are retractable at par at any time before the end of 2025. 5,000 convertible preferred shares for $150 each. The shares can each be converted into five common shares after 2021. . Required: For each complex financial instrument issued by Mega during the year, use the issue- analysis-recommendation (IAR) approach to: Determine whether the complex financial instrument should be classified as debt, equity, or as a compound financial instrument. Describe the initial and subsequent measurement requirements