Quicken investment recordkeeping Tricks

Quicken provides powerful investment record-keeping tools for individual investors. Unfortunately, once you step beyond investments like stocks, bonds and mutual funds, the mechanics can get a little 'difficult. Here are some tips for managing joint investments in Quicken.

Certificate of deposits

If you purchase a certificate of deposit, you can treat the same way you treat a bond purchase. Basically, certificates of deposit, or CDs, are just bonds issued by banks or financial institutions often for a shorter period of time. For example, you can think of two-year CD as equivalent to two-year bond.

Zero coupon bonds

If you invest in bonds, you may be aware that some titles do not actually pay periodic interest. Instead, these bonds, called zero coupon bonds, pay their interest when the bond matures. For zero coupon bonds, you need to earn annually the interest on the bonds. The annual interest needs to be completed, because, by convention, we report on the annual increase in the value of a zero coupon bond as interest accrued.

To record accrued interest on a zero coupon bond, record bond interest that matures in a normal manner. In other words, whatever amount shows how it is developed - this should appear on the statement from your broker - record it as bond interest income.

After you have registered interest bond that has matured, it is necessary to record a return capital transaction that adds this accrued interest to the value of the stock. The amount of this capital transaction, obviously, must pay the amount of accrued interest. But there's a twist here: You must specify the return of capital amount as a negative value. For example, if you accumulate $ 100 of interest on zero coupon bond, you must record a return capital transaction for the bond equal to - $ 100.

By recording the return of capital transaction is in effect transfer the bond interest money from the cash account and add it back to the associated zero-coupon bond value. In this way the associated cash account shows a balance of cash and zero-coupon bond shows the correct cost basis. The zero coupon bond is a cash equal to the original purchase price plus all accrued interest has been recorded to date.

Derivatives

Derivatives are financial instruments that derive their value from some underlying security. For example, the ability to sell a security, called a put option is a derivative. It derives its value from the underlying security. Another derivative is an option to buy a security, called a call. You can use the money to keep a register of derivatives such as puts and calls you buy.

In general, derivative record-keeping is simple enough. If you buy a derivative, such as a put or a call, and then sell the derivative is simply a normal investment transaction. To treat the purchase and then the sale in the same way they treat the purchase and sale of any stock. If you make money, you realize a gain. If you lose money, you realize a loss.

If you buy or sell a put or a call and hold the option until it expires, things work pretty much the same way. However, in this particular case, you need to record a final transaction of sale and the selling price is equal to zero. Obviously, if you hold a put or a call to its maturity, in reality they do not sell the derivative. But you must register a sales transaction to reflect the fact that the option is no longer worth anything.

These are the basic techniques you need to know for the put and call record keeping - and record keeping for similar derivatives - but there are two circumstances in which it needs more complicated record-keeping.

Sale of put and call

If you sell puts and calls - note that the earlier discussion involves you in investing puts and calls - you must register the item as a regular purchase or sell transaction. In other words, if you sell a put and the person who exercises the put option to sell, you record this as a normal sale transaction. Similarly, if you sell a call, records the transaction as an buy regular.

If you sell a put or a call and the option is exercised, you record the amount of money that the buyer pays as Other income.

Puts and calls Exercises

Typically, individual investors do not actually exercise puts and buying calls. Instead, simply sell the option back to the broker. However, you may end up exercising a put or call, and in this case, you need to run special seal records.

To record the exercise of a put option, record the sale of the put option at a price equal to zero. This zero-value sale is how to record the expiration of the option. After recording the expiration of the option, you record the sale of the stock the same way that you record the sale of any security. Remember that a put is an option to sell securities.

To record the exercise of a call option, record the sale of call options at a price equal to zero. This zero-value price allows you to record the expiration of the option. After recording the end, there is a normal purchase transaction. Remember that a call option is an option to buy a security.

Precious metals and commodities

You can treat investments in gold and other precious metals, gold coins, agricultural items and other goods in the same way you deal with actions. Rather than get into a stock price, you get into a price per ounce or price per bushel. And rather than the registration of a given number of shares, entering a specific number of any unit of measurement is used to describe the goods. In the case of gold, for example, you can enter the number of ounces. In the case of an agricultural component, you can enter the number of bushels.

This may be the opportunity to buy or sell goods in the same way you treat options to buy or sell securities. The previous discussion on managing call and put options discusses the techniques used for this record keeping ....