On the date you purchased the bond, the price should be what you paid for
it -- not par, but (in your case) 97.4773. How are you computing the
accrued interest in order to reprice the security? The difference between
that and the market price should -- I think -- be minimal. You'll still run
into problems when the bill matures, as Money isn't sure whether you've
earned interest or a ST capital gain. You are identifying the security as a
Treasury Bill, right?

--
Michael Gordon


"Sebastian" <Sebastian[at]discussions.microsoft.com> wrote in message
news2D58A81-EFAE-438C-A61E-89C46490D69A[at]microsoft.com...
- quote -

I've looked all over the internet for the answer to this one, and the only
one I found was that you could create entries for reinvested interest;
however, doing that would affect your tax calculations and wouldn't
accurately reflect your income.

I'm glad to say, I've figured out a better way that will really track the
performance and correctly state your portfolio value without affecting the
tax calculations. So on to sharing the wealth:

Say you buy a $10,000 6 month Treasury Bill at the discount rate of 97.4773.
You would make an entry into your portfolio account for a bond purchase with
the quantity of 10,000 and a price of 97.4773.

Now, this is what you really need to do to properly track this bond. Go to
the investment screen of this bond (usually by right-clicking and selecting
go to investment : ). Under common tasks, go to Update prices and select
manual update. For the date that you purchased the bond (it is probably set
to 1.000) change the price to 97.4773. Now, for each month upto the maturity
month, you will need to enter a price based on the accrued interest. The
maturity date price will be 100.

For this example, the following prices would be entered:

8/10/2006 97.477
9/10/2006 97.902
10/10/2006 98.325
11/10/2006 98.750
12/10/2006 99.177
1/10/2007 99.606
2/8/2007 100.000

That will do it. Now when you run your reports you will accurately see the
rate of return for that bond for any given period.

The only downfall I see is that it doesn't track the real market price in
case you want to sell your bond on the secondary...