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Friday, December 12, 2008

How do I record a bond sale?

You record the sale of a bond in almost the same way that you record the sale of a stock. One tricky feature of a bond sale, however, concerns accrued interest. Even in the case of a bond that periodically pays interest, you need to accrue any interest earned since the last interest payment date. (Although in the case of a zero coupon bond, you have to accrue interest earned only since the last interest accrual transaction.) You need to record accrued interest on bonds because, if you sell a bond, some of what you are receiving represents accrued interest. Read More>>