On January 1, 20X1, Metro Plaza Inc. (MPI), a real estate company, using IFRS, issued $1,000,000, 8%, five year bonds for a cash price of $1,250,000. Interest is payable semi-annually on June 30 and December 31. Each $100 bond includes 20 warrants. Each warrant can be exchanged for one common share of MPI at an exercise price of $10 per share. The market rate of interest is 6% for similar bonds without warrants and the fair market value of these bonds was determined to be $1,085,302.

c) How would the bonds be reported on the balance sheet at December 31, 20X1