Sec. 32.7320  Interest income.

    (a) This account shall include interest on securities, including 
notes and other evidences of indebtedness, which are the property of the 
company, whether such securities are owned by the company and held in 
its treasury, or deposited in trust (except in sinking or other funds, 
see paragraph (d) to this section) or otherwise controlled. It shall 
also include interest on bank balances, certificates of deposits, open 
accounts, and other analogous items.
    (b) There shall be included in this account for each month the 
applicable amount requisite to extinguish, during the interval between 
the date of acquisition and date of maturity, the difference between the 
purchase price and the par value of securities owned, the income from 
which is includable in this account. Amounts thus credited or charged 
shall be concurrently included in the accounts in which the securities 
are carried. Any such difference remaining unextinguished at the sale or 
upon the maturity and satisfaction of such securities shall be cleared 
to Account 7360, Other Nonoperating Income.
    (c) These accounts shall not include interest or other returns on 
securities issued or assumed by the company and held by or for it, 
whether pledged as collateral, or held in its treasury, in special 
deposits, or in sinking or other funds.
    (d) Interest on cash and on securities issued by others shall be 
included in

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Account 7330, Income from Sinking and Other Funds, when such assets are 
held in sinking or other funds.
    (e) Cash discounts on bills for material purchased shall not be 
included in this account.