With the recent news that Borders is going out of business, I wanted to put up a quick note about how to handle getting rid of a stock that has gone bankrupt. In short, these steps show how to enter a sale for any remaining shares, that generates no extra cash in your accounting records.

1. Select SELL from the Transactions menu
(In Club Accounting Online, go to ACCOUNTING > SECURITY > ENTER NEW TRANSACTION > SELL)
2. Select the stock in question from the drop down menu, enter the date you wish to show it being sold. Click OK.
3. Enter the Sell transaction for ALL of the shares of stock for the sale price (TOTAL) of one dollar (1.00)
4. Enter a commission of one dollar (1.00)
5. Your proceeds will be zero (0)
6. Choose the account, generally the broker account.
7. In the remarks section, enter that the stock is 'Bankrupt' or 'Worthless'.
8. Click OK.
9. In the Confirmation screen, click ACCEPT.

These steps assume that your broker does not, or will not charge any sort of a fee to get rid of the shares. While it may sound ridiculous for the broker to charge for getting rid of an otherwise worthless stock, I know I've spoke to at least a few club members over the years who ran into that situation. In those cases, I've suggested to include that cost as part of the sale, and simply adjust the total sale price to match the broker fee so that the end result is still that your account balances do not change.