I would probably record the transactions as follows:
2018/03/01 * Buy some Foo bonds at a 5% premium
Assets:Bonds 10,000 Foo @ $1.00
Expenses:Premium 10,000 Foo @ $0.05
Assets:Cash $-10,500
and later
2023/02/15 * Sell Foo bonds
Assets:Cash $10,000
Income:Bond Sales -10,000 Foo @ $1.00
Assets:Bonds -10,000 Foo @ $1.00
Expenses:Cost of Bonds Sold 10,000 Foo @ $1.00
The premium has been taken care of when you first bought the bonds and does
not need to be dealt with again.
If you sell the bonds at a different price then that is automatically taken
care of by recording the selling price of the bonds.
Your capital gain will be the bond sales less the cost of bonds sold less
the premium on the bonds bought.
On Thursday, April 27, 2023 at 9:29:17 PM UTC+8 Richard M Kreuter wrote:
> Hi all,
>
> I've had no luck finding detailed discussion or examples of how to
> account for bonds (and perhaps other similar commodities) in Ledger.
>
> Suppose you buy a bond, Foo, at a 5% premium (i.e., 1.05 times par), and
> you want to represent the premium in the lot price for Ledger's
> reporting purposes. So you write it down as, say,
>
> # Let's ignore any transaction fees/commissions/costs.
> 2018/03/01 * Buy some Foo bonds at a 5% premium
> Assets:Brokerage 10,000 Foo @ $1.05
> Assets:Cash $-10,500
>
> I believe that if you should sell those bonds later, you might record
> that as
>
> 2023/02/15 * Sell Foo bonds
> Assets:Cash $10,000
> Assets:Brokerage -10,000 Foo {$1.05} [2018/03/01] @ $1.00
> Income:Capital Losses $500
>
> However, suppose that instead of selling, the bond is ultimately called
> or redeemed (i.e., the issuer returns to you the par value,
> $10,000). How should you record that in the journal in order for the
> redemption transaction (a) to balance and (b) to leave you with zero
> units of the lot you originally purchased? It seems as if one way to do
> it is this:
>
> 2023/02/15 * Redemption for Foo
> Assets:Cash $10,000
> X $500
> Assets:Brokerage -10,000 Foo {$1.05} [2018/03/01] @ $1.00
>
> but that leaves me with the question of what sort of account X should
> be, i.e., how to record where the $500 went. (I believe that the $500 is
> not a Capital Loss, but I might be mistaken.)
>
> Alternatively, I suppose it would be possible to log a separate posting
> representing the premium at the time of purchase, i.e., have the Buy and
> Redemption transactions look like this,
>
> 2018/03/01 * Buy some Foo
> Assets:Brokerage 10,000 Foo @ $1.00
> Y $500
> Assets:Cash $-10,500
>
> 2023/02/15 * Redemption for Foo
> Assets:Cash $10,000
> Assets:Brokerage -10,000 Foo {$1.00} [2018/03/01] @ $1.00
>
> but in this case I still don't know what sort of account Y should be;
> and using $1.00 for Foo's lot price at purchase time would tend to
> squander Ledger's ability to compute capital gains / losses.
>
> Any insights/recommendations?
>
> Thanks in advance,
> Richard
>
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