Part A Mirage Ltd issued 400,000 $100 6% convertible loan notes at paron 1 January 2021. Interest is payable annually in arrears on 31 March each year. The loans can be converted to equity shares on the basis of 20 shares for each $100 loan note on 31 December 2023 or redeemed at par for cash on the same date. An equivalent loan without the conversion rights would have required an interest rate of 8%. The present value of $ receivable at the end of each year, based on discount rates of 6% and 896, are: 696 8% End of year 1 0.94 0.93 0.89 0.86 0.84 0.79 2 Required: (a) Prepare the journal entry to record the issuance of the convertible loan notes (6 marks) (b) In relation to the convertible loan notes, determine the interest cost in 2021 and the carrying amount at 31 December 2021 (4 marks) (c) Prepare the journal entry on 31 December 2023 to record the redemption of the convertible loan notes, assuming no conversion right is exercised. (4 marks) Part B Mirage Ltd is preparing its financial statements for the year ending 31 December 2021. An employee is claiming damages of $1,500,000 against Mirage Ltd because of injuries received while driving one of the company's delivery vans in September 2021. The employee is claiming that Mirage Ltd was negligent in its maintenance of the van and that the van crashed because of poor maintenance. Mirage Ltd's lawyer is of the opinion that the probability of the employee winning the case is 80% Required: Advise Mirage Ltd how to account for the legal claim for the financial year ending 31 December 2011 in accordance with HKAS 37 Provisions, Contingent Liabilities and Contingent Assets. (6 marks)