Reecording stock buys

[Derek Atkins]

Richard <Solar.Debris at Verizon.net> writes:

> So, I enter a new transaction for this stock and split it. I select
> "Buy" as the action, no memo, use the Brokerage account as the Account
> (that, presumably, is where the cash to buy stocks is coming from, but
> maybe I should have a "cash" subaccount under the brokerage account?). I
> can put in the number of shares and the price per share. On the next
> split line the action is "Fee", no memo. Account is the same.I guess I'm
> buying the commission (when I go back to edit this, the Share and Price
> fields aren't available). 

Let's say you are buying 10 shares at $15 each (for a total of $150 value)
and you are paying a commission of $5.  You have three splits:

        The buy
        The Fee
        The cash to pay for the stock + fee

So, this means you should have three splits that look like:

        Acct    Shrs    Price   Buy     Sell
        Stock   10      15      150
        Fee                     5
        Cash                            155

> So I have a three-line split. The first has the buy, the second the Fee.
> The third line doesn't have an action but does show the total cost of
> the transaction as a Sell. It's weird.

Not at all.  You are, in essense selling your cash for stock.
This is standard double-entry accounting.

> And apparently wrong because when I look at the register for the
> brokerage, I find two transactions. One shows a withdrawal for the total
> transaction amount. Then next shows a deposit of my commission fee.
> (Both are split transactions and refer back to the same transaction
> above). Where did I go wrong?

Well, this is probably because you used the wrong accounts in your
splits.

> I think that I need to go back to accounting 101. Next lesson: recording
> dividends.

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available