Attn: Tom Young re/OID Transactions

[Andrew]

Tom -

You wrote last month to account for OIDs:

"Here's the drill:

1) Create a Return of Capital transaction and enter the OID as A
NEGATIVE NUMBER.
2) Create an Income transaction and enter the OID as a positive number
and as interest.

The Return of Capital transaction will decrease the cash in the account
and increase the basis of the investment. The Income transaction will
increase the cash in the account (net cash affect = $0) and record
interest income.

Tom Young"

If one buys a bond at, say, $750 for a face value of $1,000 - in your
methodology, do you enter the original purchase price as $750 against the
original security? I assume so, but am just checking. The actual $1,000
figure will not show up anywhere in Quicken until the day you sell it (at
face) which supposedly is when the sum of the OIDs ($250) match the face
value minus the discounted purchase price .

I am just checking to make sure I do this right.

--
--
Regards -

- Andrew

[Tom Young]

Yes, you've got it right.

Tom Young

[JMC]

An additional note on this transaction series.

My FI 'Posts' all OID as the end of the year, e.g. 12/31/04.

If you sell a security [with OID] the Return of Capital transaction
must be posted at least one day before the date of sale for QW to
recognize the increase in cost basis.

Thanks to Tom for the help on this.


TomYoung wrote: Yes, you've got it right. Tom Young