mister_two

Interest accrual date 1/8/2013
Pays semi annually 1/31 and 7/31
30/360 calculation method
first payment is long 7/31/2013, so it pays from 1/8/2013 thru 7/31/2013

If I do a trade, let's say a buy, for settlement date 7/30/2013 the number of days accrue would be 203 days? From 1/8/2013 thru 7/30/2013. Come interest payment date on 7/31/2013 I will receive interest but only on 202 days? It's 30/360 so 1/8 thru end of month in Jan is 22 days follow by 6 months of 30 days (22 + (6*30))= 202 days. Is my reasoning correct so far? If so it doesn't seem right that I have to pay more interest on the buy and then receive less interest on interest payment date one day later.

magician

How can the interest accrual date be 1/8 if it pays a coupon on 1/31?

You can have at most 180 days of accrued interest. You need to compare the settlement date to the last coupon date.

mister_two

1/8 is the initial offering date of the bond. If it was bought on 1/8 settlement date it would be zero accrual.