CONVERTIBLE LOAN

HAVERFORD CO
1) On 1 January 20X7, Haverford Co issued 80,000 $100 4% convertible loan notes. The loan notes can be converted to equity shares on 31 December 20X9 or redeemed at par on the same date. An equivalent loan without the conversion rights would have required interest of 6%. Interest is payable annually in arrears on 31 December each year. The annual payment has been included in finance costs for the year. The present value of $1 receivable at the end of each year, based on discount rates of 4% and 6%,are:
4% 6%
End of year 1 0.962 0.943
End of year 2 0.925 0.890
End of year 3 0.889 0.840

The liability is then carried at amortised cost, using the effective interest rate.
Balance Interest Payment Balance
b/f 6% c/f
$000 $000 $000 $000
7,576 455 (320) 7,711
As only $320k has been recorded in finance costs:
Dr Finance costs $135k
Cr Liability $135k

Good day,Pls i don’t understand why only $135k was taken as finance costs when the full amount was 320K.I’ll appreciate if you can explain why.