Recording dividend reinvestment

[David Reed]

On Dec 30, 2005, at 1:25 PM, Todd Wells wrote:

> I have mutual funds that pay dividends.  I'm a GnuCash newbie, and  
> I read the relevant section in the user guide, but I'm not sure  
> that I've recorded my dividend correctly.
>
> In this case it was a dividend of $14.08, reinvested in .439  
> shares, priced at $32.07.
>
> The guide said to record it in the mutual fund account as income  
> from an Income:Dividend account.
>
> So in the register for the fund, I record a Transfer from  
> Income:Dividend:Non-taxable, .439 shares, 32.07 price.  The  
> transaction shows it increasing my share balance by .439.  So far,  
> so good, I think.
>
> The strange-looking part to me is if I jump to the  
> Income:Dividend:Non-taxable account, it shows Income of 14.08, for  
> a balance of -14.08.  Is this correct? The negative balance is what  
> has me thrown off -- I'm not an accountant, so I don't know if this  
> is what I should expect?  A negative income balance seems odd to  
> me.  I just want to make sure I'm getting off on the right foot here.


IANAA either but it sounds like something is messed up or you're not  
explaining it correctly.

I assume your mutual fund is a subaccount of "Assets".  You should be  
debiting the mutual fund asset account and crediting the income  
account. When you do this, the balance in the income account should  
be positive. Did you get your credits/debits backwards? I don't see  
how your share balance would increase if you had it backwards unless  
your mutual fund isn't an asset account.

I assume this is in a tax deferred account since you're marking it  
non-taxable although that doesn't affect this discussion.

Dave