Ind As 109

If you are issuing, then this instrument is a liability. Then, Equity has residual interest after deducting liabilities. Once someone purchases your instrument, cash is debited and issue is credited to liabilities as this is classifying as a debt instrument because the settlement is in cash. 

eg.

Issue proceeds=50,000 Par value

Fair value of issue= (49000) PV and issue costs subtracted. 

Allocated to Equity= 1000

Holders usually opt for agreed cash payments. When the company decided to increase its holdings, it issues shares to bond holders. These shares will usually be treated as issue of equity. Here, the equity could yield less money than a nominal interest rate will to the bond holder. So, people usually opt for cash.