On 1 July 2022, SFU Co issued a convertible bond at par value of $20 million and has recorded it as a non-current liability. The bond is redeemable for cash on 30 June 2024 at par. Bondholders can however, opt for the conversion in the form of a fixed number of shares. Interest on the bond is payable at a rate of 4% a year in arrears. The interest paid in the year has been presented as finance cost. The interest rate on similar debt without a conversion option is 10%, with a present value of $17,91 million at 1 July 2022.

Discuss how the convertible bonds should be accounted for during the 2023 financial period.

Please also show the calculations for my understanding