Accrued Interest

Interest earned on a bond since the last coupon payment.

Accrued interest is the portion of a bond next coupon that has built up since the previous payment. When a bond is sold between coupon dates, the buyer pays the seller this accrued amount on top of the price, so the seller is compensated for interest earned while holding it.

Buying the bond mid-quarter, he paid the seller the accrued interest earned since the last coupon.