ACCRINT formula problem

[BULLheaded]

Hello,
I'm trying to calculate accrued interest on a bond with
semi-annual payments using the ACCRINT function, however
it isn't calculating correctly and I can't figure out if
there is something I'm missing. The inputs I'm using (in
exact order) are:
Issue - 5/19/2003
1st interest - 11/19/2003
Settlement - 06/30/2004
Rate - 2.50%
Par - 1000.00
Frequency - 2
Basis - 0

This function will not take into account that 2 payments
have already been made since issue and it's including
these values as part of the accrued interest up to the
settlement date. The answer I'm coming up with using this
function is 27.85 but the correct answer should be 2.85
since $12.50 was paid on 11/19/2003 and another $12.50 on
05/19/2004. I've also noticed that when I change the
frequency to either 1, 2 or 4 nothing changes so basically
it seems to be calculating this bond as paying the
interest at maturity (ACCRINTM function) instead of a
paying periodic interest. I'm using this in excel 2000 but
I ran the same formula on excell 2002 with the same
result.
Any ideas??

 

[Myrna Larson]

One way to fix this is to change the issue date to the coupon date immediately
preceding the purchase (5/19/2004 instead of 2003) and similarly, change the
1st interest to the coupon date that follows the purchase (11/19/2004).

But I agree, one would not conclude from the documentation that the function
is intended to calculate interest, paid and accrued, since the issue date.