Creasy plc needs to raise 20 million and is considering two different instruments that could be issued:

A 7% debenture with a par value of 20 million, repayable at par in five years. Interest is paid annually in arrears.

(i) A 5% convertible debenture with a par value of 20 million, repayable at par in five years or convertible into 5 million I shares. Interest is paid annually in arrears.

Required:

Comment on the effect on the statement of comprehensive income and the statement of financial position of issuing these differen instruments.