Selling Treasury Note: How do I handle Accrued Interest vs earned interest

Clive Walden

When purchased I entered Capital Amount and Accrued interest amount.
On Sale There is a Capital field and an Accrued Interest field. What do I enter in the accrued interest field:
1. The original amount?
2. The total interest returned?
3. (2-1)?
4. Something else?

bmciance

Hi Clive, when you purchase the note it works the same way.  You enter the amount of the interest paid in the accrued interest field.  Then when you sell the note, you do the same with the amount received.  On both the purchase and the sale Quicken will create two entries, one for the principal and one for the accrued interest.  Here is an example of a corporate bond that I have where I bought it and later sold it (maturity would be the same as the sale)



Note that when you purchase the bond you enter the accrued interest as a positive amount and Quicken will make it a negative interest entry.  The sum of both interest entries is the amount of interest that you earned on the note (78.02 in my example).

Hopefully that clears it up.

bmciance

You would put the interest that  you receive on the sale in the accrued interest field (assume that is what you are referring to as "total interest returned").  Quicken will then create 2 entries.  One for the principal sale and one for the interest received.

Clive Walden

bmciance. Thanks for trying. I guess my question was not clear enough.
When I bought the note, it was not new issue, I paid for both capital and the interest already accrued on the bond (that interest is not part of MY income).
When the note matures I also get two amounts The capital value of the note and the total interest the treasury pays on the note. Now MY earnings are this amount LESS the amount I paid for interest already accrued at the date of my purchase. Hence my question:
My earned interest is obviously (2-1) but I don't know how Quicken handles what I enter in the accrued interest field. If I enter the total interest received in the Accrued Interest field, is Quicken smart enough to do the math?

bmciance

Hi Clive, when you purchase the note it works the same way.  You enter the amount of the interest paid in the accrued interest field.  Then when you sell the note, you do the same with the amount received.  On both the purchase and the sale Quicken will create two entries, one for the principal and one for the accrued interest.  Here is an example of a corporate bond that I have where I bought it and later sold it (maturity would be the same as the sale)



Note that when you purchase the bond you enter the accrued interest as a positive amount and Quicken will make it a negative interest entry.  The sum of both interest entries is the amount of interest that you earned on the note (78.02 in my example).

Hopefully that clears it up.

Clive Walden

Thanks a lot. It's the first note I purchased with accrued interest and I wasn't sure how Quicken wanted the data entered.