An investor who own's 20% is demanding I give him access so he can see every single transaction that i make on the business account. Is this right?

It depends completely on the legal documents you both signed related to his investment in the company. Those documents will either provide for "information rights" or not. If the documents don't stipulate to these kinds of rights, you are not obliged to show the investor anything.

You may want to produce balance sheets and/or monthly a/c balances instead of giving access to all transactions & books. He is an investor and would be naturally keen to understand how his money is doing; however, as the owner and 50% equity holder, you may want to reserve the right to accessing all transactions.

Normally an investor has the right to inspect the accounting books. But he needs to ask it in a formal manner with a letter, he cannot just come and ask for the books you could tell I do not have them ready for you. Be careful this is normally an atypical situation (as numbers are reviewed during the shareholders meetings) and i strongly suggest that you consult your company's lawyer and use him to follows this case. Laws can be slightly different depending states and companies bylaws.

That is the problem of taking money in. Investors have the right to "scrutinize" transactions if they want. It is also a sign that probably you are not reporting they way it should be. You should maybe grant access to the investor to you backend via an api or even just allow them to have access to the data base you keep your records. If you do something like stripe or paypal just grant him access as an additional user.

Most importantly, you have to have a structured clearinghouse conversation with this investor. Yes, the above answers cover all the financial and legal options. Now we must uncover the "pain point" of this investor - is it slow maturity of his/her ROI? Or is it a reaction to some red flag, or maybe to a slighting? Engage with them in a trust building and sharing exercise, and I am happy to talk with you more about how useful questions and your prepared answers can put this valuable person at ease till your company succeeds.

It hard to give you solid advice on just the informaiton provided, but,clearly, something triggered this request and it appears fundamental trust might be at the root of it. If he/she has been an investor for a period of time, how well have you kept them informed about the business' progress? Have you sent out periodic financial statements? Have you engaged in periodic review meetings or dialogues with this investor (or the other for that matter)? If this is a new investment (with the last 90 days or so), have you executed an agreement with them? Were there any stipulations in that regarding the frequency or depth of reporting to shareholders? And, finally, (and this is my guess) is this investor one who has never done this before - i.e., put his/her money at risk? That may be the issue. Hope this helps you sort it out.

I have been through this and can understand his perspective.

A few things to consider
-What quarter is it?
-What terms were laid out in your LLC operating agreement
-Did you have recipts, everoted from mint or financial tracking ( if not do this right away to protect yourself)
-Did you spend money on a consulting draw/ working capitol
-Did you completely bleed the funds?
-Is the investor reasonable with the deliverables

I would take this request seriously yet abide by audit agreements. It takes a tremendous amout of time to share these deliverables. Each investor is different. VC's are more seasoned so request professional processes. If you need some pointer, ring me and i can share how to get more time or how to proceed without your investor getting paranoid they will lose their money.