DM: Estimated Interest Accrual Not Calculated Correctly For Debt Deals
(Doc ID 2295386.1)
Last updated on SEPTEMBER 01, 2020
PeopleSoft Enterprise FIN Deal Management - Version 9.2 and later
Information in this document applies to any platform.
Estimated Interest Accrual not calculated correctly for Debt Deals
1. Create a new INSTRUMENT TYPE of Debt
Day count basis - 30/360
Discount/Premium- Straightline Method
Interest Frequency - Semi-Annual
Business Day Convention - Following
Interest Calculation - Interest Bearing
2. Create a Deal with the above Instrument Type
Enter Transaction Date as -5/16/2017
Enter Settlement Date as -5/16/2017
Enter Maturity Date as -04/01/2026
Change Coupon Start Date to 4/1/2017
Enter Rate as -3.50
Enter PAR Amount -$220,000,000
Enter Settlement Amount -$225,820,100.00 & Price % of PAR 102.2080
Purchased Interest of -962,500.00 automatically populated.
3. Clicked Cash Flows. Amount is correct.
4. Navigate to Estimated Interest Accruals.
Accrued interest by day is not correct. See calculation below:
PAR Amount of $220,000,000 multiplied by Rate of 3.5% multiplied by 1 day divided by Day Count Basis of 360 = $21,388.89
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