CD Accrued Interest - Merrill Lynch

I bought a $50,000 CD. Merrill Recorded the purchase as 500 shares at $100. It has a maturity of about 5 years. When I look at my portfolio online it shows a value of 50,450 which is calculated as the original $50,000 plus $450 of accrued (not paid) interest.

Now if I record the $450 as an Interest transaction it shows up in my cash balance but still shows the value of the CD as $50,000. If I show it as a reinvestment transaction it asks me for the new share amount. So if I put it in as 4.50 at 100 my quicken now shows that I own 104.50 shares which creates a place holder transaction since the shares in quicken do not match the shares show by Merrill. How can I record the $450 of accrued interest with impacting my cash balance or the number of shares show.

Comments

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    I would want to know when the $450 is payable (taxable)?  I do not generally make adjustments to the valuation until the interest is paid.  I usually see a brokerage report (for bonds) Market Value, then Market Value + accrued but not paid interest.  That is, two separate valuations. 

    When the interest is paid, I have used a ReinvInt transaction to increase the value of the CD.   
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    There's various ways of skinning that cat but the approach you take does depend on when you want to actually show the interest income in your records.  Assuming the interest isn't taxable until the CD matures and you want to show the correct value of the CD along the way, then simply change the "Quote" to reflect the higher value as interest accrues.  Once The CD matures you change the quote back to $100 per share, record the interest income from the CD, then sell the CD for no gain or loss.