In most all respects such a transaction would involve entries just the opposite of those described under a transaction of purchase. Assume that we sold on June 30 fifty Liberty 31/2's due 1932 at $100 flat, accrued interest $10, commission $2.50. The general ledger entries would be:

The Auxiliary Records

The entries in the register and ledger on a sale of bonds are slightly different. Information required to record a sale is somewhat different from that required to record a purchase. The auxiliary entries covering the above sale are as follows:

This entry on the credit side of the ledger would reduce the amount shown in the money column under "balance," which is on the debit side, by $4,997.50, leaving a money value balance for this security of $4,957.50. In other words, the cost of securities purchased, increased by the commission, less the proceeds of sales diminished by the selling commission, equals the book value and also the general ledger value of securities on hand. This is complicated by another fact, and that is that when securities depreciate in value, conservative policy demands that they be "written down." This may be accomplished by charging undivided profits or a security depreciation account of the bank and crediting the security account on both auxiliary and general ledger, or by using interest collected for the same purpose. The result of that process is to reduce the amount of the money value of the securities shown under "balance" on the debit side of the bond ledger.