Question 7 Moonstone Berhad issued an 8% RM20,000,000 convertible loan at par on 1 July 20x4, which is convertible to ordinary shares or redeemable at par in cash in three years' time. Moonstone Berhad's Board of Directors decided to issue a convertible loan because a non-convertible loan would have required an interest rate of 10%. The directors are of the opinion that the loan should be recorded at RM20,000,000 under non-current liabilities. Required: Compute how Moonstone Berhad should treat the convertible loan in its financial statements for the year ended 30 June 20x5. The present value discount factors for 8% and 10% are given below: