1. Which statement is incorrect regarding compound financial instruments?

A. The split of the components is mad at initial recognition

B. PAS 32 requires that the component parts be accounted for and presented separately

C. Compound financial instruments have both a liability and an equity component from the issuer's perspective

D. The liability component is assigned the residual amount

2. The printing cost and legal fees associated with the issuance of bonds should

A. Not be reported as an expense until the period of the bonds mature over or are retired

B. Be expensed when incurred

C. Be recorded as a reduction of the bond issue amount and then amortized over the life of the bonds

D. Be reported as a deduction from the face amount of bonds payable