HOW TO ENTER A BUY OF A TREASURY NOTE BOUGHT AT 98 AND MATURES AT 100

jmm930

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Boatnmaniac

To expand upon what @Tom Young said: Enter two transactions.

1. A Sell transaction with the sell price being the same as the original 98 Buy price.
2. An Interest Income transaction for that matured security for the 2.

Tom Young

You buy it at 98. At maturity you "sell" it at the same 98 for no gain or loss. The leftover "2" is called what it is, Interest Income.

bmciance

Is is a "Bill" or a "Note"? I think only Bills are bought at a discount so that the amt you earn as interest is included in the amount at maturity. These are short term, 3- 9 months. Notes are longer term, I think 5 - 10 years. They pay interest semi-annually. If you buy it for less than 100 and keep it to maturity the difference would be a capital gain when it matures.

Boatnmaniac

To expand upon what @Tom Young said: Enter two transactions.

1. A Sell transaction with the sell price being the same as the original 98 Buy price.
2. An Interest Income transaction for that matured security for the 2.

bmciance

@Boatnmaniac and @Tom Young , what you are saying is only true for zero coupon Treasuries like Treasury Bills. If this is a "Note" as the OP indicated, it would work like any other "bond". You enter the buy at 98 (there could also be some interest paid if this was bought on the secondary market) and then when it matures it is "sold" for 100. The difference is a capital gain, not interest. Treasury Notes pay interest every 6 months and at maturity. I have had this for several Treasury Notes in the past and I also currently have some where I paid 87 and 96. These mature in several years. If I hold them to maturity I will have capital gains on them (they are in my IRA so that doesn't really matter).

If, however, this is a Treasury Bill, you would be correct since they only pay interest at maturity and that interest is included in the 100 price you would receive.

@jmm930 , is this a NOTE or a BILL? OR, is this a "Zero coupon" bond? That would act like a Treasury Bill.

jmm930

yes these are T Bills - thanks

bmciance

https://community.quicken.com/discussion/comment/20375685#Comment_20375685

In that case, what @Tom Young and @Boatnmaniac said are what you should do. Thanks for clarifying.