To set up a PIK bond corporate action, the security master record you enter for the announcement must have a processing security type (PST) of DBIBPK (Interest Bearing Debt PIK). When you use this PST, Eagle Accounting accrues and processes accretion and amortization in the normal manner, but the dropping of a coupon and or creation of Baby Bonds, occurs within corporate action processing. You can add securities with this PST using Issue Viewer's Add Long Term Debt panel.
During corporate action processing, the system creates the transaction based on information you add for the PIK bond corporate actions. Be aware that you also add a PIK receivable mark to market schedule for a PIK bond security. The system uses that schedule security reference information during the Earnings process to calculate a yield for the security. You can also use the Schedule table to identify whether a PIK bond is paying in shares for a given coupon period. For more information, see "Reference Data."