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

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jmm930
jmm930 Member
edited August 2023 in Investing (Windows)

XXXXX

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  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭✭
    Answer ✓
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    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.

    Quicken Classic Premier (US) Subscription: R57.16 on Windows 11

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  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited July 2023
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    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
    bmciance SuperUser ✭✭✭✭✭
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    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
    Boatnmaniac SuperUser ✭✭✭✭✭
    Answer ✓
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    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.

    Quicken Classic Premier (US) Subscription: R57.16 on Windows 11

  • bmciance
    bmciance SuperUser ✭✭✭✭✭
    edited July 2023
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    @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
    jmm930 Member
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    yes these are T Bills - thanks

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

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