Mawuena Ltd issued 1500 convertible loan note at par on 1st January 2015. The loan notes are redeemable in four years time at their par value of GH 200 per note. The loan note pays interest annually in arrears at an interest rate of 8%. Each loan note can be converted at the maturity date into 10 GH 1 shares. The effective interest rate for four year loan notes with no right of conversion is 12% and the risk-free annual interest rate for a four-year term is 7%.

Required Show how the loan note should be treated in the financial statement of Mawuena Ltd in accordance with IFRS 9 Financial Instrument