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I didnt understand anything Can any one explain this .
Answers (1)
Best Answer
Since the share price reduces upon issue of rights to offset it to the extent of cost of investment it is applied to reduce cost and balance charged to p&l This is because while you bought investment you paid for the investment and right to buy additions( rights and bonus) and since the rights are sold and market price has reduced you are offsetting ur cost of investment to cost without right ( ex right cost) So for second question 10,000 should be credited to cost of investment and 2000 to p&l
