Convertible bond

J F
J F Quicken Windows Subscription Member
edited December 2023 in Registers & Transactions (Windows)

How do I record a Quicken transaction when a convertible bond matures and converts into stock?

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Answers

  • Tom Young
    Tom Young Quicken Windows Subscription SuperUser ✭✭✭✭✭

    I would think the proper approach here would be to record the maturity first.

    The usual way of doing this is to "sell" the bond at its maturity value -which typically would result in no gain or loss. Assuming the "cash to you" at maturity includes a final interest payment, you'd recognize that portion of the cash using an IntInc action.

    Then, assuming that the maturity value of the bond is used to buy the stock, you use that cash to buy the stock at the conversion price.

    There are various varieties of convertible bonds, each with their own "mechanics" of conversion, so without knowing those details the above assumes that your bond is of the "plain-vanilla" variety. If that's not the case then add the missing details particular to your bond.

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