Racquet Plc Issued £20 Million of Convertible Notes on 1

Racquet Plc 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 Plc 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) $\begin{array}{|l|l|r|l|}\hline \mathrm{Dr} & \text { Convertible notes liability } & 18359921 & \\\hline \mathrm{Dr} & \text { Option to comvert notes to equity } & 1906616 & \\\hline \mathrm{Cr} & \text { Share capital } & & 20266537 \\\hline\end{array}$
B) $\begin{array}{|l|l|r|l|}\hline \mathrm{Dr} & \text { Convertible notes liability } & 18093384 & \\\hline \mathrm{Dr} & \text { Option to convert notes to equity } & 1906616 & \\\hline \mathrm{Cr} & \text { Share capital } & & 20000000 \\\hline\end{array}$
C) $\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Convertible notes liability } & 18359921 & \\\hline \mathrm{Dr} & \text { Option to convert notes to equity } & 1906616 & \\\hline \mathrm{Cr} & \text { Gain on conversion of options } & & 266537 \\\hline \mathrm{Cr} & \text { Share capital } & & 20000000\\\hline\end{array}$
D) $$\begin{array} { | l | l | l | l | } \hline \text { Dr } & \text { Convertible notes } & 20000000 & \\\hline \mathrm { Cr } & \text { Share capital } & & 20000000 \\\hline\end{array}$$