On 1 April 2019 Amtrak Limited issued an 8% $10,000,000 convertible bond loan at par. The loan is convertible in three years to ordinary shares or redeemable at par in cash. The directors decided to issue a convertible loan because a non-convertible loan would have required an interest rate of 10%. The directors intend to show the loan at $10,000,000 under non-current liabilities. The following discount rates are available:

8% 10%

Year 1 0.93 0.91

Year 2 0.86 0.83

Year 3 0.79 0.75

Required:

Describe (and quantify where possible) how Amtrak Limited should treat the item above in its financial statements for the year ended 31 March 2020 commenting on the directors views where appropriate.