Accounting for capital gains of an investment asset?

DehanLouwDehanLouw Member Posts: 2

So, I had some cash left over, and bough listed equities through an investment platform. As a DIY accountant- this introduces three questions for me, which I can't quite wrap my head around. Has anyone smarter than me maybe done this before?

  1. How to record the buying transaction?
  2. How to record the selling transaction?
  3. How to record the capital gain/loss resulting from the above?
edited October 1, 2020 in Accounting Technical Support

Comments

  • AlexLAlexL Member Posts: 2,869 ✭✭✭

    Hey @DehanLouw , we actually have a super handy Help Center article on accounting for capital assets in Wave. Check it out!

  • TheRealJennTheRealJenn Member Posts: 6

    hi there.. i am wondering the same. How do i account for trading account balances the company actively holds and trades for investment purposes

  • AlexLAlexL Member Posts: 2,869 ✭✭✭

    Hey @TheRealJenn , you can check out the Help Center article that I posted above. If you do require any further advice past that, I'd recommend reaching out to an accountant or CPA as can be considered complex accounting.

  • TheRealJennTheRealJenn Member Posts: 6

    thank you so much. I alreadcy did and it did not answer my query. I have figured out that I need to make a journal transaction to account for the trading asset balance but I am unsure how to make the adjustments every month to the balance of the trading asset balance.

  • CameronCameron Member Posts: 32

    I had a great session today with a Wave accounting coach and he helped me do the transactions for my ETF purchases.

    Here's how it works:

    • Transfer money into Brokerage - Transfer from Checking - Debit - $300
    • Purchase stock ETF - Short-term investments - Credit - $105
    • Get dividends - Dividend income - Debit - $1.05
    • Sell stock shares - Split-transaction (1. Short term investments - $105, 2. Short term capital gains $3.00)
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