Field and numerically simulated data show that coplanar induction measurements (σxx and σyy) are affected by both conductive and resistive muds. The effect is, for a resistivity contrast of 10 or less between the formation and mud, approximately proportional to the resistivity contrast. The borehole effect is generally stronger for a decentralized tool. In the perpendicular eccentricity mode, the eccentricity effect on σxx or σyy can be greater than 100% of the true formation responses. We demonstrate that dual‐frequency processing can reduce the eccentricity effect by an order of magnitude. We investigate the effect of invasion for both circular and elliptic invasions. For circular invasion, the effect on σxx, σyy, or the coaxial measurement (σzz) is characterized by a critical invasion thickness. For invasion thinner than the critical thickness, the effect is minimal. The effect increases rapidly as invasion thickness increases beyond the critical thickness. For elliptic invasion, both the σxx and σzz responses are similar to those of the corresponding inner circular invasion. Beyond a long‐to‐short‐axis ratio of three, an elliptic invasion behaves like a long, thin fracture.