a) To raise much-needed finance, the directors of Grom plc decided to issue convertible bonds. On 1 January 2020, the company issued 4-year 180,000 convertible bonds at par value. The bond will pay coupon payments of 2% at the end of each year. The bond is convertible to ordinary shares or redeemable at par in cash on 1 January 2024. The market rate of interest for a similar bond that is non-convertible is 4%. Required: Show how Grom plc should report the convertible bond in its financial statements for the year ended 31 December 2020 in accordance with IAS 32 Financial Instruments: Presentation. (10 marks) b) Gray Plc acquired 50,000 shares of Adam Plc on 12 October 2020 for 2.50 each. Gray Plc expects the share price to increase in the next 3 months and intends to sell the shares to make a profit. Adam Plc shares are quoted at 2.80 on 31 December 2020. On 18 January 2021 Gray Pic sold all of the shares invested in Adam Plc for 2.70 per share. Required: Show how this financial asset should be reported in the financial statements on 31 December 2020 and explain how the disposal will be accounted for, in accordance with IFRS 9 Financial Instruments. (9 marks) c) Mirror Plc is a UK based company which uses as its functional currency reported the following financial assets/liabilities: 1) Investment into 5 million bonds issued at a fixed coupon rate of 3%. The current market rate of interest is 1.5%. ii) Borrowings of 6 million with a variable interest rate. The interest rate tracks the Bank of England rate plus a spread of 2%. Required: Identify, with reasons, the types of risks related to the above financial instruments that are required to be disclosed under IFRS 7 Financial Instruments: Disclosures. (4 marks) (Total: 23 marks)