Cool Tech Co. issued 1,800 convertible bonds on January 1, 2019 at par. Each bond is redeemable in four years time at its par value of $1,000 per bond. Alternatively, each bond can be converted at the maturity date into 225 $1 shares. The bonds pay interest annually in arrears at an interest rate of 5%. The effective rate, adjusted for issue costs, is given at 8%.

Show the presentation of the compound instrument in the financial statement at inception, explaining your answer clearly. Round off your answers to nearest whole number.