What is compound journal entry to record reclassification

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Question - Reclassification of Financial Asset and C22: Investment Property and Cash Surrender Value - On June 30, 2021, ABC Corp. purchased a $3,000,000 face value bonds with $2,925,067.05 cash. The interest rate is 10%, payable semiannually every June 30 and Dec. 31. The remaining term as of acquisition date is three years. ABC purchased it for both contractual cashflows and trading purpose, and hence initially designated it as FA-FV-OCI. The effective interest rate is 11%. Within the year 2022, there was a change in the purpose of holding the investment to maturity. As of the end of the years 2022 and 2023, the bonds were valued at $2,950,000 and $2,975,000 respectively. 

Required - What is the compound journal entry to record the reclassification and update the related accounts? Include the date and explanation. Solutions must be in good accounting form.

Reference no: EM132911510

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