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Charles Schwab Bond Purchase transaction download into Quicken R53.32

MJB

Charles Schwab Bond purchase download split into two (2) transactions.

1. Purchase of the bond.

2. Accrued interest.

If I manually enter the same transaction, I could include Accrued Interest in the same transaction. Which method is correct?

Thanks,

MJB

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Comments

q_lurker

I believe you will find that through the BuyBonds pop-up filling in the Accrued Income field produces a second transaction - the basic Bonds Bought and a MiscExp transaction - thus paralleling your Schwab download. So effectively, they really are the same. The accrued income amount does not flow into the basis of the bond.

Tom Young

I assume the accrued interest was the amount you paid to the previous bondholder because of your purchase of the bond between coupon dates. Although Quicken's entry characterizes it as an "expense" that's not the case; it's actually a reduction of the income to be received sometime in the future at the next coupon date.

Back when I was purchasing bonds I created a "security" titled "Accrued Interest on Bond Purchases" and "bought" that security for the amount of accrued interest I paid. Then when the coupon date rolled around - sometimes several months after the purchase of the bond - I "sold" that security for no gain or loss, increasing cash, and then recognized the interest income as the difference between the actual cash received and the amount that I "received" on the "sale" of the Accrued Interest "security."