AS-13
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
23 June 2011
why is any consideration received incase of sale of rights is adjusted against investments?
shakuntala chhangani
(Expert)
24 June 2011
Hi, the market price of the share increases in anticipation of Right/bonus. so when u buy shares cum right, u pay higher price. for the total price paid (principal + right portion, u pass the following entry:
Investment A/c dr.
To bank a/c
Here, cost of right also get debited to investment A/c. now, if u sell the right without subscribing the shares, it should definitely be credited to investment a/c (as the cost already got debited to invt. a/c)
Regards, CA Shakuntala Chhangani
Investment A/c dr.
To bank a/c
Here, cost of right also get debited to investment A/c. now, if u sell the right without subscribing the shares, it should definitely be credited to investment a/c (as the cost already got debited to invt. a/c)
Regards, CA Shakuntala Chhangani
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