Fixed Income Again

[Doug Laidlaw]

On Wed, 2 May 2007 04:17:25 am John K. Taber wrote:
> On Tue, 2007-05-01 at 10:45 -0700, Dawning Sky wrote:
> snip
>
> > Excuse my straightforwardness, I don't get what you're complaining about.
> >
> > I hold Treasury Bills too.  Through Treasury Direct too.  I find no
> > difficulty in tracking them in GnuCash.
> >
> > Here's what I do.
> >
> > Establish an account under Asset, say named Treasury Direct.  Whenever
> > you buy a note, bill, bond, whatever, transfer the amount you actually
> > pay from whatever the funding account is, in my case, a savings
> > account I have in another bank.  The split looks like this
> >
> >
> > Asset:Treasury Direct               9950.00
> > Asset:Savings                                                 9950.00
> >
> > At maturity, the transaction looks like this:
> >
> > Asset:Savings                      10000.00
> > Asset:Treasury Direct                                     9950.00
> > Income:Interst:Treasury                                      50.00
> >
> > And this is exactly what happened in the reality.  Treasury and IRS
> > doesn't treat your income from T-Bills as Capital Gain.  It's an
> > interest.  And what Treasury Direct tells you on how much you have in
> > their account doesn't matter until reaching maturity.  You T-Bills
> > don't worth $10000 until they reach maturity.
> >
> > DS
>
> OK, you convinced me, I was wrong.
>
> John
>
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That is what I would have done, but perhapps slightly differently.  One of the 
first principles of accounting is that you don't change the figures - you 
enter a journal.  An auditor needs to see exactly what you have done.

I might have done this:

Asset: Treasury Bills : $10 000.00
Cash: $ 9 950.00
Discount on bills: $50.00

With both, you have an account containing your accumulated discounts.  
Whichever way you go depends on your tax situation.  Is the $50 taxable 
income?  If so, Dawn's setup would do.

HTH,

Doug.
-- 
If you don't have a dream,
How are you going to have a dream come true?
   - Oscar Hammerstein II.