1.   The third financial instrument was a loan from a shareholder. The company borrowed a $6 million dollar loan at a rate of 4% when the market rate of interest was 6%. The company received the lower rate of interest by agreeing that in five years time, the lender would have the option to receive repayment in full in cash or to accept 40,000 common shares as full repayment. Assume the loan was advanced on January 1, 2018.

a)    Prepare all the 2018 journal entries to account for the financial instruments under both ASPE and IFRS. For ASPE assume that the company chooses to value the equity component of compound financial instruments at $0.  For financial instruments 1 and 5, also show the journal entries for subsequent years.