QUESTION:

 PQR Ltd. reclassifies a financial asset from being measured at amortized cost to fair value through profit or loss. The fair value of the asset is $50,000, and the carrying value of the asset was $45,000.

ANSWER:

The journal entry to record the reclassification adjustment is:

DR. Financial asset (amortized cost) $5,000

CR. Fair value adjustment (OCI) $5,000