Money paid for IPO under ASBA in someone else

Accounting Entries 1713 views 1 replies

As per the new ASBA rules, a person can apply for shares in a IPO on behalf of  5 persons.

How will the accounting for the payment be made in the books of the parties.

 

I am giving an example:

A applies for the shares worth 2 lakhs in name of B with all details of B only including his demat account number.

The Bank withholds 2 lakhs from A's Bank account till the shares are alotted & when the shares are alloted, that much amount is debited to A's Bank account & the balance amount is released for utilization

Shares for 15,000 are alloted to B by the company & the shares are credited directly by the Registrar to the demat account of B & the bank account of A is debited by15,000

B gets the shares & pays 15,000 to A + 250/- as interest for utilising his money for the IPO period

 

How will the entries be passed in the books of accounts of both A & B and also how will the confirmation be made

 

Thanks for advising

Replies (1)

B shall be debited amt to Rs. 15000 at the time of allotment of shares nd bank will be credited nd when  B will pay the same ,B & Interest shall be credited. In my opinion it shall be treated  simple transaction as we do at the time of  making loan to the parties.

                   If m wrong then correct plz.


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