Entering reinvest interest transactions RRS feed

  • Question

  • I have a question related to Money Sunset and intrest accural and dividen payments.  How do I account for them in my cash trasnactions because periodically I get dividens and I get intrest income, but it seems to throw off my balance in my cash transactions.  What I do when I get a dividen is to issue a dividen transaction and then an immediate reinvestment dividend transaction and would have thought that would be enough to zero out the cash transaction accounting of it, if not what would you suggest I do in my cash trasactions to account for this as well as the small interest payments that are being made because I am trying to get the account to mirror the zero balance it has and I believe that the balance is off by my interest gains and my dividend gains, any suggestions??
    • Split by Cal LearnerModerator Wednesday, April 18, 2018 12:32 AM Split at suggestion of Bill Becker
    Tuesday, April 17, 2018 8:03 PM

All replies

  • This should really be a new thread...Cal?

    Maybe these points will help you get your cash account register to match your investment statements.

      - You probably have a money market investment.  Your financial institution may show this as "cash" or "FDIC Insured Deposit Account" or something similar, but it's really an investment that earns (a pitiful amount of) interest.

      - When you receive a dividend payment (not a dividend reinvestment) it goes into the Money cash account.  Then, typically, your financial institution uses that cash dividend to purchase that same amount of your money market fund.  This zeros out the cash account and increases your money market holdings by the amount of the dividend.  So you see two transactions, - one where the dividend goes into the Money cash account and one where that amount is used to purchase shares of the money market investment.

      - A dividend reinvestment is a single transaction that increases the number of shares of the investment by the amount  of the dividend.  It has no effect on the Money cash account.

      - I suspect that the small interest payments that you see are the earnings of the money market account.  If you don't see a corresponding purchase, then these amounts are not actually cash interest payments but rather are reinvestments of money market interest and should be entered in Money a "Reinvest Interest". 

    If this doesn't help, post back with an example. 

    Bill Becker

    Tuesday, April 17, 2018 9:47 PM
  • Karl, for each interest, dividend, capital gains etc transaction that can be entered into the investment transactions there is an increase in the related cash account if you track cash. Then you can use that money to buy more if the cash gets used for reinvestment. Those should leave the balance in cash account as it was.

    There are also reinvest interest, and other reinvest ... transactions. They are like two transactions in one. For Money market accounts, as Bill commented on, these are often set up to "sweep" cash. Depending on the broker, and how it is set up, you may have buys and sells of the sweep money market fund as investment buys and sells. Mine is not that way. Instead they are not shown, and the sweep money market interest comes in as an entry into the cash account.  That keeps the clutter in the register down.

    I think that is what Bill suspect is happening with your account.

    Wednesday, April 18, 2018 12:42 AM