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
CAclubindia
