investment account

where will we record sale of right issue in investment acc*nt...explain in detail
Replies (7)
It will be credited to the investment account and any gain or loss will be transferred to P&L
please explain with eg...it is not clear to me properly
please explain with eg...it is not clear to me properly
please explain with eg...it is not clear to me properly

sale of right issue (which is not acquired by trader) is based on the price at which original shares acquired. 

original share are shares on which right shares offered by the company.

alt1: when original shares acquired at cum right price, then sale value of right issue is credited to INVESTMENT A/C.

alt 2: when original shares acquired at ex-right price,  then sale value of right issue is credited to PROFIT AND LOSS A/C.

if original share are acquired at cum right basis then right price will credited to which side of investment account .....income side or amount side?

when original shares are acquired at cum-right  means cost of right benefit includes under cost of investments.

so sale of right issue is to be credited to Investment A/c.

where as original shares are acquired at ex-right  means cost of right benefit  does not includes under cost of investments 

so in this case sale value considered as income. then credited in income column

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