Solutions pls

(7) Racquet Ltd issued $20 million of convertible notes on 1 July 2013. The notes have a life of 6 years and a face value of $20 each. Annual interest of 5% is payable at the end of each year. The notes were issued at their face value and can be converted at any time over their lives. Organisations with a similar risk profile to Racquet Ltd have issued debt with similar terms but without the option to convert at the rate of 7%. What are the appropriate accounting entries to record the conversion of the notes to equity on 1 July 2014 (after interest has been paid and recorded)? A. Dr Convertible notes liability Dr Option to convert notes to equity Cr Share capital 18 359 921 1 906 616 20 266 537 B. Dr Convertible notes liability Dr Option to convert notes to equity Cr Share capital 18 093 384 1 906 616 20 000 000 C. Dr Convertible notes liability Dr Option to convert notes to equity Cr Gain on conversion of options Cr Share capital 18 359 921 1 906 616 266 537 20 000 000 D. Dr Convertible notes Cr Share capital 20 000 000 20 000 000