GnuCash: how to enter the purchase of a corporate bond with accrued interest

[Larry Evans]

On 02/26/2015 05:41 PM, Wm wrote:
> Thu, 26 Feb 2015 08:06:12 <mcn98l$966$1 at ger.gmane.org>  Larry Evans
> <cppljevans at suddenlink.net>
> 
>> On 10/21/2010 06:04 AM, Christopher Singley wrote:
>>> On Thu, Oct 21, 2010 at 12:36 AM, JDDomine <jddbusiness at juno.com> wrote:
>>>> I have not figured out how to enter the purchase details of a
>>>> corporate bond
>>>> with accrued interest.  If the interest is rolled into the purchase
>>>> price,
>>>> it would erroneously affect any capital gains calculation if / when
>>>> the bond
>>>> is sold or called.  How can this be handled with GnuCash??
>>>
>>> Accrued interest doesn't increase your cost basis; it is interest
>>> expense.  You report it to IRS as a negative number on Schedule B,
>>> where it should offset items of interest income coming in on
>>> f1099-INT.
>>>
>>> You can book it as two separate transactions - one for the securities
>>> purchase, and another for the payment of interest.
>>
>> To see if I understand correctly, I've provided screenshots of a simple
>> account tree, the Bond asset account ledger, and the Bond interest
>> income account, and the corresponding irs Schedule B.
>>
>> Do these screenshots accurately reflect what you've said above?
> 
[snip]
> I think you've got the purchase of the accrued interest (an expense) and
> the interest you receive (income) the wrong way around. You should have
> an expense (negative income) when you buy the interest portion and
> actual income when you receive interest.
> 
> So if your purchase was 103 (100 + 3) and you received 5 interest your
> net interest income account should show 2.

But that sounds just like what I have.  Notice that in the 'Bond
Interest' transaction register, on 2014-06-01, under the Charge
column, there's a 5 and in the Balance column, there's 5.  My
preferences were Edit->Preferences->Accounts->Reversed Balanced
Accounts=None.  When I changed that to
Edit->Preferences->Accounts->Reversed Balanced Accounts=Income & expense
the Balance column showed -5 instead of the previous +5 and in the
same register, on 2014-12-31, the Balance column showed +5 (my original
example used 5 instead of your 3).

So, as far as I can tell, the only difference between you example
and mine (besides your 3 for accrued interest instead of my 5)
is the Edit->Preferences->Accounts->Reversed Balanced Accounts
value.

Am I missing something?

-regards,
Larry

this to Edit->Preferences->Accounts.None.
[snip]