Why wouldn't a call count as a capital loss? I also like the approach of
splitting the purchase into two transactions, but I might make the premium
another asset instead of an expense.
2018/03/01 * Buy some Foo bonds at a 5% premium
Assets:Bonds 10,000 Foo @ $1.00
Assets:Bond-Premium 10,000 Foo @ $0.05
Assets:Cash $-10,500
Then depending on your local tax rules, you could reduce the bond premium
asset either by amortizing/expensing it each year over the life of the
bond, or book it as a loss all at once in the case of a sale or a call.
On Thursday, April 27, 2023 at 9:43:58 PM UTC-4 psionl0 wrote:
> 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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