How do I record a maturing treasury note that is reinvested?

[Arthur Dyck]

On Sun, 2007-04-01 at 08:35 -0500, John K. Taber wrote:
> I have a two year US Treasury note that has matured, and that will be
> immediately reinvested in another two year note. The note is held by
> Treasury Direct, a US Treasury agency that is a cheap way to buy and
> keep treasuries, on my behalf.
> 
> The transactions are not simple.
> * final semi-annual interest is paid to my checking account
I would enter this as interest income.

> * the principal is virtually returned, but not actually to my checking
> account. The remittance to the bank says PAR and INT for that CUSIP, but
> only the interest is deposited.
> * On April 2, most of the principal will buy the Note maturing Mar 31,
> 2009. Since there is a difference between the face interest rate
> (4-1/2%) and the actual, not all the principal will be used, thus
> adjusting the effective interest rate to market.  
> * A small portion of the matured principal that wasn't needed for the
> new note will be returned to me by being deposited in my checking
> account.
I would use a split transaction: part of the asset going towards the new
treasury bill asset and part going to your checking account.  Just a
straight transfer of funds, I would think.
> 
> Question: How do I record a matured bond? In Quicken I simply used a
> Sell transaction code, and commented that the bond had matured. But
> should it not be return of capital? Then I recorded the purchase of the
> new bond at the actual price, and the small return as Xout (money
> transfered to my checking account from Treasury Direct). I have no idea
> if that is the right way of doing things. It just worked for me in
> Quicken.
You would still have treasury bond listed as an asset, but now as a
value of 0.  You could use any comments you  like to indicate what has
happened.  Hope this is helpful.

Arthur
> 
> I would appreciate any help.
> 
> I am using GnuCash 1.8.9 on FC3.
> 
> John
> 
> 
> 
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.