CD interest recieved

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cbrown
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Joined: Sun Dec 21, 2014 7:50 am

CD interest recieved

Post by cbrown »

We have a couple short term CDs that accrue a little (very little) interest. The interest is reinvested in the CDs, effectively increasing their value. How do I account for the interest? Do I increase the Equity account for each CD by receiving the interest as income and closing it to the CD account? Do I just increase the value of the Equity account for the CD? Thanks.

NeilZ
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Location: Dexter NM
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Re: CD interest recieved

Post by NeilZ »

cbrown wrote:We have a couple short term CDs that accrue a little (very little) interest. The interest is reinvested in the CDs, effectively increasing their value. How do I account for the interest? Do I increase the Equity account for each CD by receiving the interest as income and closing it to the CD account? Do I just increase the value of the Equity account for the CD? Thanks.
I did some searching in the older topics, and found some good info: What I would do is this:

Hopefully you have some type of miscellaneous income account setup under the 4000 series. Its best to keep this type of income separate from normal income as you really can't use it unless you cash in the entire CD.

Then I'd enter a transaction in Funds Accounting as follows, account numbers are examples but in the proper range of accounts.

01-1200-000 DB 100.00 - CD
01-4200-000 CR 100.00 - Misc Income
Neil Zampella

Using PC+ since 1999.

2ndPresKnox
Posts: 1
Joined: Mon Aug 02, 2021 10:15 am

Re: CD interest recieved

Post by 2ndPresKnox »

Sorry to resurrect an old thread but we are needing an answer to this very question. The problem I see with the above accounting for CD interest is that it will show up on the Income & Expense Report as miscellaneous income each month it is entered. How do we enter the interest earned without it showing up in the report for that month? We would rather it all show up at once when the CD is cashed in and the funds are actually available for use.

Thanks!

Tim

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
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Re: CD interest recieved

Post by NeilZ »

2ndPresKnox wrote:
Mon Aug 02, 2021 10:23 am
Sorry to resurrect an old thread but we are needing an answer to this very question. The problem I see with the above accounting for CD interest is that it will show up on the Income & Expense Report as miscellaneous income each month it is entered. How do we enter the interest earned without it showing up in the report for that month? We would rather it all show up at once when the CD is cashed in and the funds are actually available for use.

Thanks!

Tim
In that case, I would do as you would for Mutual Funds. Do a search on Mutual Funds and you will turn up the threads on those.
Neil Zampella

Using PC+ since 1999.

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