Question 1 (33 marks)Canadian Scientific Ltd. issued (600,000 of convertible bonds on July 1, 20X2. Thebonds mature on June 30, 20X9, and bear an interest rate of 7%, paid each June 30. Thebonds are convertible at the rate of 100 ordinary shares for every 1,000 bond.RequiredAnswer each of the following two parts independently.Part (a) (3 marks)The bonds are convertible at the option of Canadian Scientific Ltd. The market interestrate on the day of issuance was 7%.Calculate the portion of the bond proceeds allocated to debt versus equity.Part (b) (30 marks: 6 marks each for Requirements 1, 2, 3, 4, and 5)All terms are the same as Part (a), except the bonds are convertible at the investor'soption. The financial instrument was issued for total proceeds of (680,000. The bondalone was valued at 6539,602. No value can be separately calculated to value the option.1. Calculate the portion of the bond proceeds allocated to debt versus equity.2. What interest rate is implicit in the bond valuation?3. Prepare a table showing the interest expense and the net bond liability over the life ofthe bond4. What would appear on the statement of financial position (indicate category), incomestatement, and statement of cash flows for the year ended June 30, 20X6? Do notseparate the current portion of long-term debt. On the statement of cash flows, thedirect method is used to disclose operating activities.5. Prepare a journal entry to reflect the following independent events:a. Conversion of the bond to ordinary shares on June 30, 20X3.b. Repayment of the bond with cash on June 30, 20X9, and the lapse of rights.