by Investment account is an account opened for the purpose of the investment. Further, if the number of investment is large, a separate account for each investment should be opened.
Accounting entry on the purchase of any investments are given as hereunder:
| On purchase of investment | Investment A/c Dr.
To Cash/Bank A/c (Being Investment made) Note: Investment account is inclusive of purchase expenses like stamp duty, Commission, and brokerage. |
| On Sale of investments | Cash/Bank A/c Dr.
To Investment A/c (Being Investment made) Note: Investment account will be credited with net realized value of investment. |
| Interest and dividend account | Cash/Bank/Investment A/c Dr.
To Dividend/Interest A/c (Being Interest/dividend received on investments) Note: Investments account will be credited in case, interest/dividend accrue and cash/bank account will be debited (in case) with net realized value of investment. |
