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

[nvsoar]

On 3/5/2015 6:40 PM, Wm wrote:
> Thu, 5 Mar 2015 14:10:26 <mdad7j$c4v$1 at ger.gmane.org>  Larry Evans 
> <cppljevans at suddenlink.net>
>
>> I see the post has made it; so, I'll provide links to the
>> screenshots that were in my (what I thought was) a private-email
>> to Alice.
>>
>> The links are:
>>
>> https://www.dropbox.com/s/cg2u2egmaac3mv4/alee-Bond.png?dl=0
>> https://www.dropbox.com/s/q0edql98t7fbi9b/alee-BondInterest.png?dl=0
>> https://www.dropbox.com/s/0kc615tes8yosx9/alee-
>> InterestReceivable_buy.png?dl=0
>> https://www.dropbox.com/s/dd97jfndk3usxa7/alee-InterestReceivable_income
>> .png?dl=0
>>
>> The links were provided instead of attaching the .png files to
>> save bandwidth at the cost of a litter convenience.
>
> I can see them on remote, will have a look in more detail at the weekend
>
FWIW - this is what John M Hoffman & Associates CPAs has to say about 
the subject.  nvsoar
____________________________

/What is accrued interest purchased and what is the tax implication?/

    Most bonds pay interest every six months. This is the coupon date.
    Let's say that you purchase a $10,000 bond paying 6% interest that
    will mature on September 30, 2015. Every March 31 and September 30
    until (and including) September 30, 2015 the bond issuer pays
    interest at the stated rate of the bond (the coupon rate). In this
    case that amount is $300 (6% times $10,000 for one half a year).

    If you buy that bond on September 15, you will be the one that gets
    that full coupon payment representing six months of interest on
    September 30. Sounds like a great deal. Not so fast. Not that it is
    a good deal or a bad deal but what occurs is a fair deal. When you
    buy that bond, you will pay the seller the interest from the
    previous coupon date through the purchase date. In this case
    essentially 5 and 1/2 months of interest.

    This amount that you pay is the accrued interest purchased. In this
    case that amount would be approximately $250. In a perfectly simple
    world, you would pay $10,250 to acquire the bond, $250 of that being
    for the accrued interest.

    On September 30, you receive a coupon payment for $300. This $300
    payment is reported as interest income to you. At tax time we will
    want to report the $250 of accrued interest purchased as an offset
    to your $300 of interest income, essentially netting out to the $50
    that you actually received.

    In the subsequent year things will be very simple, two coupon
    payments of $300 each and the resulting $600 being the interest
    received and taxable for that year.
    ________________