Some companies or mutual funds pay periodic dividends to shareholders. Dividends are typically given in one of two ways, either they are automatically reinvested into the commodity or they are given as cash. Mutual funds are often setup to automatically reinvest the dividend, while common stock dividends usually pay cash.
If the dividend is presented as cash, you should record the transaction directly in the asset account that received the money, as income from Income:Dividends with a note mentioning from which commodity it was derived. There is no simple way to show this transaction from within the stock or mutual fund account itself.
As an example consider the following; a purchase of IBM stock with the dividends deposited as cash into the Broker Account.
An image of the Brokerage Account register after a series of cash dividends.
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If you want to track dividends on a per-stock basis, you would need to create an Income:Dividends:STOCKSYMBOL account for each stock you own that pays dividends. | |
If you receive the dividend in the form of an automatic reinvestment, the transaction for this should be handled within the stock or mutual fund account as income from “Income:Dividend” for the appropriate number of reinvested shares. This type of reinvest account is often referred to as a DRIP (Dividend Re-Investment Program).
As an example consider the following; purchase of NSTAR (NST) stock with the dividends reinvested into a DRIP Account. Mutual fund re-investments would be the same.
Starting with the purchase of 100 shares on Jan. 3, 2005, all dividends will be
reinvested and an account is created to track the dividend to the specific stock. GnuCash
simplifies the entry by allowing calculations within the cells of the transaction. If the
first dividend is $.29/share, enter $53.38 in the share price and 100*.29 in the Buy cell.
An image of the Stock Account register after a series of dividends reinvestment.
An image of the Accounts tree after a series of dividends reinvestment.