Bond Performance and ROI/Yield
[ Message Board ]
[ Archives ]
[ Search ]
Posted by Gary Trimmier on March 05, 2006 at 10:40:54:
Mark,
I have searched the board and in numerous questions and responses I cannot seem to find any information on how to correctly record a bond purchase. To cite an example of my problem: I have purchased a bond whose par value is $100.00 for $104.00. Its my understanding that bonds are traded like stock, and can be bought and sold above or below the maturity value (par value). However, also the buyer (me) will pay the seller the accured interest on the bond on the day of purchase. Lets say that amounts to $1.50. So now the cost of the bond is $105.50. Also there is a handleing fee associated with the purchase of $1.00. Can you or someone suggest the correct way to record these transactions, so that FM will present the correct performance/ROI/yield.
Thanks,
Gary Trimmier
Replies:
|