Bonds with Ex-Dividend Periods may have Negative Accrued Interest. ... If a bond is purchased during the ex-dividend period, then any accrued interest from the purchase date until the end of the coupon period is subtracted from the clean price of the bond. In other words, the accrued interest is negative.

Can accrued interest be zero?

The counterpart transactions to accrued interest are financial transactions in the respective debt securities. In this case, accrued interest for the debtor principle is generated only by the coupon payments; accrued interest due to discount is zero.

Is accrued interest a debit or credit?

The accrued interest for the party who owes the payment is a credit to the accrued liabilities account and a debit to the interest expense account. The liability is rolled onto the balance sheet as a short-term liability, while the interest expense is presented on the income statement.