Nikka Corp., a company that follows IFRS, holds 10,000 preferred shares of Ohishi Corp. The investment is accounted for under the fair value through other comprehensive income (FVOCI) model. In previous years, Nikka has recorded a $15,000 credit balance in Unrealized Gain or Loss-OCI in connection with the Ohishi investment. The shares have just been sold for $275,000, which is $12,000 more than the current carrying value of $263,000.

Required:

Prepare the following entries:

a. The entry required to adjust this investment to its fair value at the end of the sale. (2 marks)

b. The sale of the investment (2 marks)

c. The reclassification entry (2 marks)