How do I record Viacom Fixed to Float Corporate Preferred Stock.

Jeff Richards

I purchased Viacom Fixed to Float Corporate Preferred Stock.  There is accrued interest . Which type of investment transaction do I use to record in Quicken 2017 ?

q_lurker

In my experience "accrued interest" can be a nebulous term and depends on context.  Is this an actual cash transfer into your account?  If so, I would likely record it as an Interest income transaction.  Include an 'accrued interest' notation in the memo field.  It may also be appropriate to record it as a Dividend if that is the way the 'normal' income from this investment will be recorded.

Tom Young

As far as I can tell Viacom has not issued preferred stock though they have issued "debentures" that carry that "fixed to floating" moniker.  A debenture is just an unsecured bond and if that's what you have then use the "Bonds Bought" action.

Rocket J Squirrel

Accrued interest is most likely to be an expense on a purchase and income on a sale. If you buy a bond or debenture which is not a new issue, it has likely accrued interest prior to your purchase. You must pay for that interest.

Record a Miscellaneous Expense transaction with the category _Accrued Int.

Tom Young

Rocket J Squirrel said:

Accrued interest is most likely to be an expense on a purchase and income on a sale. If you buy a bond or debenture which is not a new issue, it has likely accrued interest prior to your purchase. You must pay for that interest.

Record a Miscellaneous Expense transaction with the category _Accrued Int.

If you use the Bonds Bought action Quicken will make that expense entry for you as part of the purchase of the bond. 

(Of course that "expense" really isn't an expense, it's a reduction of your interest income.  If the purchase of the bond and the next coupon date all occur in the same year then your income won't be misstated.  Your _IntInc will be over stated but it will be offset by that _Accrued Int expense.  With the few bonds that I've bought I've always included an "Accrued Interest" "security" that gets sold, at no gain or loss, when the coupon date occurs.)

Jeff Richards

Tom: Thank you.  I thought the only alternative was to select "purchase Bond transaction " within Quicken