17-05-2021 b) Tables Management faced with cash flow challenges, decided to raise finance through issuing P700, 000 4% loan-notes with a maturity date of three (3) years. The issue was made on the 1st of July 2019 at a 15% discount and the notes will be redeemed at a premium on the maturity date. The cost of issuing the notes was P15, 000 and the effective interest rate is 20%. Chairs Productions financed their expansion plans on the 1st of July 2017 by issuing a five-year 3% bond with a nominal value of P550, 000. The bond was issued at a discount of P65, 000 and it is redeemable at a premium. The effective rate of interest for this bond is 12% and the using costs can be ignored. Each company reports their financials on the 30th of June. Required: For each company, illustrate and explain how each financial instrument should be accounted for. Additionally, calculate the premium that will be paid for each instrument. (15 marks)