Merinda Ltd issued $6 million of convertible notes on 1 July 2023. The notes have a life of 5 years and a face value of $20 each. The notes pay interest at 4% per annum in arrears. The notes were issued at their face value and each note can be converted into one ordinary share in Merinda Ltd at any time over their lives. Organisations with a similar risk profile to Merinda Ltd have issued debt with similar terms but without the option to convert at the rate of 6% per annum. Other information: Required: a) Calculate the present value of the notes and the equity component of the convertible notes. b) Provide the appropriate accounting entries to record i) the issue of the convertible notes on 1 July 2023; ii) the payment of interest on 30 June 2024 and 30 June 2025; iii) the conversion of convertible notes into shares on 30 June 2026 [Narrations are not required]