Hanover Enterprise Limited (HEL) issued $6,000,000 convertible debentures at January 1, 2019. The debentures have a four-year term, and interest is payable annually in arrears at a nominal annual interest rate of 10% percent. When the debentures were issued, the prevailing market interest rate for similar debt without conversion options was 14 %.

The following discount rates are available:

End of year PVIFA 10% PVIFA 14%

Year 1 0.9091 0.8772

Year 2 0.8264 0.7695

Year 3 0.7513 0.6750

Year 4 0.6830 0.5921

Required: 

In relation to the convertible debentures disclosed above, prepare extracts of the entity’s statement of profit or loss and statement of financial position for the year ended December 31, 2012.