Question

Purchased shares of infosysis comapny rs 50000 and rs 500 paid as brokerage by Demat A/C journ entry

Answer 1

Answer:

50500

Explanation:

50000shares and broke 500

Answer 2

Explanation: Purchase of shares and Brokerage paid.

• Purchase and sale of shares are executed with the help of a brokers.
• These brokers charge a certain percentage as commission against their services they provide in helping one sell their shares.
• This commission is known as ‘Brokerage'
• As this brokerage/ commission is regarded as capital in nature they are added to the cost of acquisition of the shares.

• When shares are purchased through a demat account we pass the following entries:  

          Investment in Shares Account Dr   Rs 50000

          To Bank Account Cr.  Rs 50000

• When Brokerage is paid the entry will be as follows:

            Brokerage Account Dr.  Rs 500

          To Bank Account Cr.   Rs 500

Since buying shares through demat involves a cost. the cost of investment in shares will go up by the amount of brokerage which needs to be recorded by passing the journal entries.

                  Investment in Shares Account Dr  Rs 500

                To Brokerage Account Cr  Rs 500

Hope this helps.