I have an investment that pays monthly returns.
It is unclear as to the best way to record the monthly returns because the returns are paid 10 days after the previous month end in which they were earned (i.e., the return for the period December 1, 2023 to December 31 2023 was deposited into my account on January 10, 2024).
The other interesting / important point is that the the return for the period December 1, 2023 to December 31 2023 is treated as taxable income in 2023 (i.e., the time period it was accrued, not paid).
Options:
i) If I backdate the transaction to December 31, 2023 then a) bank statement for December 2023 will not balance and ii) calendar 2023 reports will be correct (i.e., include the correct amounts for tax reporting purposes).
ii) If I record the transaction on January 10, 2024 then a) bank statement for December 2023 will balance and ii) calendar 2023 reports will be incorrect (i.e., exclude the December 23 return which should be included for tax reporting purposes).
iii) I thought about going to the added length of treating the returns as an account payable which would work except I have both business and personal investments like this and there are — to the best of my knowledge — no personal A/R reports. There is also the point that this is a lot of work!
Very interested in how others record or suggest recording such transactions.
Thank you.
