How to handle T-bills - Especially when received back with interest payment

You can make a bank deposit to record the income and original purchase price, @gc141.

I'm happy to show you how to record your interest income.

Here's how:

1. From the Homepage, select Make Deposits.
2. In the Payments to Deposit window, choose the payment you want to include with the deposit.
3. Click OK, and it will go to the Make Deposits window.
4. Tap the Deposit To list and choose the bank account you want to deposit into.
5. Add two line items. 
   For line 1, enter the amount of the interest income amount.
   For line 2, enter the original purchase amount under the current asset account.
   Note: Make sure the total amount is equivalent to the amount you received as the redeemed price.
6. Hit Save & Close.

For more details, read this article for reference when creating deposits: Record and make bank deposits in QuickBooks Desktop.

You can read this article to guide you in reconciling your account: Reconcile an account in QuickBooks Desktop.

Let me know if you have questions about making deposits in QuickBooks Desktop. I'm always here to help. Have a great day.

Thank you for responding.  I'm still not clear on the whole process. This is what I have setup in my Quickbooks pro 2016.

Treasurydirect withdraws funds from my checking acct for purchase of a T-Bill ($24,910.75)

I then created an (other Current Asset) account called T-Bills.

I created a Vendor called Treasury Direct.

I wrote a check from my Checking account to the vendor Treasury Direct and charged to account T-Bills. The amount was for $24,910.75.  This transferred the amount out of checking and into the T-Bills Asset account.

Now the Treasury Bill has been redeemed and Treasurydirect deposits the full $25,000 into my checking account which includes the interest payment I receive which is $89.25.

I have a Interest Income Income account so I created a Interest from T-Bills sub account.

So now I don't know how to link this $89.25 interest income to the $24,910.75 Tbill and transfer it all back into the checking account and make sure it will not screw up my bank account when reconciling it.

As you can probably determine I'm not any sort of a book keeper.

Thanks for any additional help you can offer.

Gilbert

Hey there, @gc141.

Thanks for getting back to this thread. 

We can link the $89.25 interest income to the $24,910.75 by recording them both as a single deposit in QuickBooks Desktop. You can still follow the suggestions above to record the transaction. You can also check the screenshot below as your reference when recording the payment and the interest. 

If your account is connected to online banking, you can match this transaction to your downloaded. That way, they will automatically be cleared on your bank register. 

If not, you can manually reconcile the transaction inside QuickBooks. 

I'd also suggest getting in touch with your accountant before recording your vendor payment and interest. They can provide you with the right advice in making sure your books are accurate. 

In case you need help with other tasks in QBDT, feel free to browse this link to go to our general topics with articles. 

If you have any other follow-up questions about this or any QuickBooks questions, please let me know by adding a comment below. I'm always here to help. Have a good one!

I think the questions for me are:

• When I purchase a T-Bill, do I write a check in QB to the vendor "US Treasury" at the purchase value (let's say $4950)?
• Do I create an "other asset" account for the T-Bill value to sit (at $4950)?
• When the Treasury Department returns the mature T-Bill (now $5000) to my bank, do I create a deposit for the original amount with another line item for the interest earning?
• And then HOW DO I CLEAR THE OTHER ASSET ACCOUNT OF THE ORIGINAL VALUE I CREATED ($4950).

It seems there has to be an easier way top do this with Treasury Bills. Clearly, I want them sitting on my reports as an asset until they mature and I get them back.

What is the full process, best practice, to enter the asset, track the asset, receive the cash back with interst, and still have the Balance Sheet correctly reflect the asset and where it sits.

Thanks!

The questions for me is "What's the whole process?"

Do I:

1. Create an "Other Asset" account to hold the purchase price of the T-Bill (let's say in this case it is $4950).

2. Write a check to US Treasury to pay for the T-Bill, and assign the value to that account.

3. When the matured value comes back to my account, create a deposit with a second line item for the interest.

4. And...HOW DO I THEN CLEAR THE ASSET FROM THE "OTHER ASSET" ACCOUNT?

I definitely want to have the asset sitting in my balance sheet while it is still not matured, so it's clear where the $4950 went.

But if I simply deposit it back to the back with interest, then I still will have the $4950 sitting in the "Other Asset" account (which it obviously would not be).

What is the best practice scenario to manage this. start to finish?

Val

Welcome to the Community, MaineDWD. I appreciate your detailed information.

To properly identify if you should create an asset account, write a check to a vendor, create a deposit with additional line items for interest you've accumulated, and etc., I'd recommend working with an accounting professional.

If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

Here's how it works:

1. Go to our Find a ProAdvisor page.
2. Use the City or ZIP search field to specify a location.
3. Select Find a ProAdvisor.
4. Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.
   
   

Once you've found an accountant, they can be contacted through their Send a message form:
 

1. Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
   
   
    
2. Enter your appropriate info in the Your name, Your email, and Your phone number (optional) fields.
   
   
    
3. Hit Send message.
   
   

You'll also be able to find many detailed resources about using QuickBooks in our help article archives.

Please feel welcome to send a reply if there's any additional questions. Have an awesome Wednesday!

@gc141 

When you receive the $25K from TreasuryDirect, create a bank deposit and under 'Account', enter the T-bills asset account for $24,910.75 and your Interest Income account on the next line for $89.25.  That will create a bank deposit for $25K, it will close your T-bills asset account, and book $89.25 in income. 

@MaineDWD 

When you create the bank deposit, enter two lines: one for the interest income and a second for the original purchase price.  That will book the interest income, close the asset account, and create a deposit for the combined amount.

I understand how to do the deposit. I was hoping there was a way to transfer the asset (original purchase price) to the bank, then do a deposit for the interest. The would move the asset from the one account to the checking account.

I'm going to play around with this and see what I can come up with. I'll get back to this thread with what I learn!

Today I tested whether it works well to set up "Other Asset" accounts for T-Bills, and once matured, TRANSFER that asset at it's original purchase price to a checking account, and THEN make a deposit for the interest amount earned on it. And it works GREAT.

Here is how I set up our T-Bill accounts (Subaccount T-Bills under "Other Assets", then sub-sub-account for each T-Bill, showing the code and the number of times we set it to automatically renew (just to keep track of them individually)). Each was assigned to these account on purchasing them from Treasury Direct:

When a bill matures and is returned to our checking account, we'll transfer the specific bill to our checking account, and create a deposit for the interest earnings.

This will leave the "Other Asset" T-Bill account empty for re-use (name can be edited for a different bill).

Hope this helps. May not be how everyone will do it, but it makes sense to me to track each individual bill, and simply transfer the amount back to checking once it matures and is returned by Treasury Direct.

Val

I just found your post and wanted to Thank You!  I use QB Online, but couldn't get it to automatically connect to my E*Trade account.   I've been looking for a way to manually record my T-Bill purchases.  Your way will work perfectly!  Happy New Year!

Vicky

Hi Val,

How would you record the interest deposited for the reinvested TBill?  When that occurs, you don't get the original amount deposited back.  Treasury Direct simply deposits the "refund" and purchases the TBill automatically.  Do you simply create a new purchase line item in Other Assets?

Hi,

I record it on reconciliation of that bank statement. As an example, let's say I have a %5K t-Bill that matured and was renewed (meaning only the earning hit my bank account, not the full $5k).

When I'm reconciling my bank statement, I sinly include the interest earning (let's say it's $45.75 by adding it to my regular interst earned in the account each month (let's say $0.22). So, my interest earnings on reconciliation are $45.97.

After reconciliation, I simply transfer the $45.75 from my bank asset line to my "other asset" line where I track our T-Bill earnings separately.

Hope that makes sense.

Val