G1 Corp. issued $40 million Class C Ordinary shares on January 1, 2017 for cash. The shares pay a 5% cumulative annual dividend in preference to other shares. The shares are callable at par until December 31, 2018 after which the dividend rate resets to 20%. The board of directors of G1 Corp. did not declare a dividend on the shares during 2017. Required: 1. Briefly discuss the appropriate classification of the financial instrument issued by G1 Corp. in 2017. Support your answer. 2. Prepare all the journal entries associated with the bond for the years ended December 31, 2017 and 2018.