Re: Entering prepaid bond interest

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In Reply to: Re: Entering prepaid bond interest posted by Mark on October 14, 1999 at 19:24:02:

Mark, when you buy a bond that someone else has owned for part of the interest period (e.g. buy a bond in March that pays interest in Jan and July,) you as the owner in July will receive the full six months interest. Obviously, you owe the previous owner the interest for the period from Jan to March, and that is paid when you buy the bond over and above the stated price of the bond.

What I've decided to do is just add that to the cost of the bond. It increases the cost, but when I get the full six months interest payment in three months, the yield on the higher cost should be accurate (I think; I haven't thought it thru entirely.)
Joe

: Hi Joe,
: I'm not sure I understand how the prepaid interest works, but it sounds
: like a negative distributed distribution. This will have a corresponding
: entry in your cash account.

: Thanks,
: Mark
: --
: Mark Beiley
:
: Fund Manager for Windows 3.1x/95/98/NT
:
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Replies:

• Re: Entering prepaid bond interest Mark 13:45:41 10/17/99 (0)