The Journal Entries when Shares are Purchased and Brokerage and Other Expenses are Paid

When you will buy any share of company through your DEMAT account, it will be your investment and you have to pay many expenses on it. So, cost of investment in shares  will increase with this by adding brokerage and other expenses in it through passing the journal entries.

Simple Journal Entries

1. When We Buy the Shares 

Investment in Shares Account Dr

Bank Account Cr.

2. When We Pay the Brokerage and Other Share Buying Expenses

Brokerage and Other Share Buying Expenses Account Dr.

Bank Account Cr.

3. When We transfer all the expenses in the buying cost of Shares

Investment in Shares Account Dr.

Brokerage and Other Share Buying Expenses Account Cr.

Now, Learn with example, you bought KIE Industries shares 2 @ rate of Rs. 410.45 per share and paid brokerage per unit 2.05 and also bought NIIT shares 3 @ rate of 102.75 and paid brokerage per unit 0.51

1. When you have bought shares of companies

Investment in KEI IND. shares Account Dr.  Rs. 820.90
Investment in NIIT Shares account Dr. 308.25

Bank Account Cr. 1129.15

2. When You have Paid Brokerages and Other Expenses like GST and STT (Security transaction tax ) , Stamp duty

Brokerage on KEI Shares  Dr. 4.10
Brokerage on NIIT Shares Dr. 1.53

STT on KEI Dr. 0.69

STT on NIIT Dr. 0.31

GST on total Brokerage  Dr. 1.02

Stamp Duty Account Dr. 1

Bank Account Cr. 8.65

3. When these brokerage and other expenses transfer to investment in share account for increasing the cost of our investment

Investment in KEI and NIIT Shares Account Dr. 8.65

Brokerage and other expenses Account Cr. 8.65

{ Brokerage on KEI Shares   4.10
Brokerage on NIIT Shares 1.53

STT on KEI . 0.69

STT on NIIT D 0.31

GST on total Brokerage   1.02

Stamp Duty Account  1 }

Now our total cost of investment in KEI and NIIT = 1129.15 + 8.65 = Rs. 1137.84







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Accounting Education: The Journal Entries when Shares are Purchased and Brokerage and Other Expenses are Paid
The Journal Entries when Shares are Purchased and Brokerage and Other Expenses are Paid
Accounting Education
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