Journal Entry for T-Notes Not Balanced

Hello,

I am preparing a journal entry for an investment account and have questions. I'm comfortable with almost all of the journal entry, except for the change in value of T-notes. I was previously told that T-Notes earn interest, so there are no realized gains or losses when redeemed.

The difference between the beginning and ending balances for the T-notes was a decrease. One of the T-notes was redeemed, but the amount it was redeemed for is greater than the decrease of the balances. There was a small amount of interest earned when the T-note was redeemed. I also notice that there is accrued interest, which I don’t know if I am supposed to record this.

Here are some fake numbers to help explain.

Beginning balance: $40,800

Ending balance: $34,146

Difference: $6,654

T-Note redeemed: $6,900

Difference: ($346)

Interest on T-Note: $3

On the brokerage statement, the T-Note and interest were deposited to the cash/sweep account.

Where do I record the difference of $346? Does this represent the accrued interest?

Proposed Journal Entry

Debit    Cash                                     $7,000    Record redeemed T-Note

Debit    Cash                                     $3           Record interest earned on T-Note

Credit   T-Notes                                 $6,654    Record change in value

Credit   Interest & Dividends             $3           Record interest earned on T-Note

Credit   ???                                       $346       ????

Thank you!!