Accrued Interest Paid is missing from Downloaded Bond transactions Edward Jones

tbf47

This past week I noticed bond purchases did not contain the accrued interest paid within the down loaded transactions. Theinterest paid did show up on the printed trade confirmation from the Ed Jones website. I have check my settings for a problem . I did not see any setting that might affect it. I called my JONES office. They are checking with the Jones I.T. folk. Any info would be appreciated.

Quicken for Windows R64.29 …. Started using Quicken daily in late 1980's Thanks.

tbf47

Accrued interest is an expense component of a purchase bond transaction. If you do not account for it seemingly you maybe tax on it if you do not offset it the accrued interest you were charged for. I learned yesterday my brokerage firm (Ed. Jones) is not passing the accrued interest paid by me in the transaction via my Quicken OSU download…… I am having to figure out the amount for each and edit each transaction input the accrued interest which creates a separate line item for an expense. This is not efficient. I am open to someone who can tell me what is going on with this.

Tom Young

"Accrued interest is an expense component of a purchase bond transaction."

No it's not, at least not using the proper accounting definition of an expense.

Yes, it's money out of your pocket which to most people "feels" like an "expense", but what it really is a form of a "receivable." That money will come back to you with the next coupon payment where you'll get the entire amount of the payment, even the amount that the previous owner earned while he held the bond.

So the broker does remove the cash from your account, but all they download is the cash used to buy the bond?

I assume Edward Jones has the ability to send a confirmation of the purchase? The confirmation should be available to you one day after the trade itself and that confirmation should have the accrued interest on it. Use that confirmation to manually enter the trade using the Bonds Bought action. Quicken will make two entries, one the the bond purchase and one for the accrued interest. The substituent download should result in a Match of the bond purchase and you manually "clear" the accrued interest transaction after making sure the sum of the two transactions reduces cash by the correct amount.

Quicken does account for the accrued interest as a form of expense and you can leave it that way if you want to, though depending on timing your Income and Expense by Category report could be understated in one period and then overstated in a subsequent period.

tbf47

I disagree with your play on words.

Tom Young

There's no "play on words" going on here.

I know most people call most outflows of cash an "expense" but that's not really the case. The accrued interest is most properly viewed as an "asset", some sort of "receivable," because you will get that money back with the next interest payment. So if you buy a bond with accrued interest in 2025 but the first bond payment isn't until 2026, you won't the entire amount of the payment on your 2026 tax return, you'll reduce that payment by the amount of the accrued interest you paid.

Quicken's Bond Bought action doesn't actually do "proper" accounting for a bond purchased with accrued interest, though if the purchase and 1st payment of interest all happen in the same year than the net of the accrued interest plus the coupon payment all washes out to only the excess of coupon over accrued interest being declared as income.

tbf47

The amount of the accrued interest was paid from the brokerage account cash instantly when I bought the bond. Key words

Paid Instantly

So I disagree with your proposed terminology.

Tom Young

https://community.quicken.com/discussion/comment/20511834#Comment_20511834

You can say those exact same words about the bond purchase itself but I'll bet that you didn't expense the bond, did you? But really, do whatever you think is right for you.