on January 1, 20x1, Michael Hedges Co, Required 10%% 2,000,000 bonds for P1.903,926. The principal is due on January 1, 20x4 but Interest is due annually starting December 31, 20x1. The yield rate on me bonds is 12%. The bonds were classified as investment measured at amortized cost On September 1, 20x2, Michael Hedges Co. changed its business model. It was ascertained that the investment should be reclassified to held for trading securities., The quoted prices were 101, 103 and 104 on September 1, 20x2, December 31, 20x2 and January 1, 2013, respectively. Requirements When is the reclassification date? Provide the journal entry on reclassification date On January 1. 20x1, Erik Mongrain Co acquired 10%, P2,000,000 bonds for P1,903,926. The objective of Erik Mongrain's business model is to sell such bonds in the near term to take advantage of fluctuations in fair values for short-term profit taking. Accordingly, the bonds were classified as held for trading securities. On December 31, 20x1, the bonds are quoted at 98 On February 1, 20x2, Erik Mongrain Co. changed its business model, It was ascertained that the investment should be reclassified to financial assel measured at amortized cost The quoted prices were 90, 103 and 104 on February 1, 20x2, December 31, 20x2 and January 1, 20x3, respectively. Requirements Provide the journal entry on reclassification date. Determine the amount of to be amortized over the remaining life of the bonds subsequent to reclassification date. State whether the amount is a premium or discount