GHI Ltd is a local entertainment enterprise which has its shares listed on Hong Kong Stock Exchange. It has the following financial instruments It has invested in the following companies

1. There was a debenture issued by BIQ Production Ltd. On 1 January 2020, GHI acquired a 15% $800,000 debenture with 4 year term at its fair value. The debenture will be redeemed at its nominal amount. Interest is payable at end of each year, in arrears. GHI Ltd's target is to hold such bond to collect cash.

2. EDM Ltd is a company listed on Hong Kong Stock Exchange and has total 1 million issued ordinary shares. On 1 November 2020, GHI Ltd invested in 400,000 ordinary shares of EDM Ltd at its listed market price of $100 each, plus transaction costs $150,000. GHI Ltd intended to hold the shares for long term purpose. On 31 December 2020, the share price of EDM Ltd roses to $105 each.

Required

1. Recommend and briefly explain the appropriate measurement bases of investment made by GHI Ltd in both BIQ Production Ltd (5 marks) and EDM Ltd (5 marks)

2. `All financial liabilities must be measured at amortized cost'. Discuss whether you agree with this statement. (4 marks)