Hi Rainflurry,

Thank you so much in providing me a solution.  The transactions volume are quite high hence i am not certain whether this solution is going to work effectively.

Back to your solution.  I would appreciate if you can confirm my understanding with the entries please.

Assume the short selling of shares borrow was USD5000.  The repurchase was USD4800.  The gain was USD200.

When borrow the stock:

Entry 1: Use Expense Transaction

Line 1: Investment Account 5000

Line 2: Shares Short Sell 5000

When sell the stock:

Entry 2: Use Bank Deposit

Line 1: Investment Account 5000

Line 2: Other Income 200

When repurchase the stock:

Entry 3: Use Expense Entry

Line 1: Investment Account 4800

When shares are returned:

Entry 4: Use Expense Entry

Line 1: Investment Account -4800

Line 2: Shares Short Sell 5000

Lime 3: Other Income -200

Looking forward to your reply.  Truly appreciate your help on this transaction.