13-61 CONTINUED Long-term Debt Date December 31, 2013 Initials Prepared by AA 2/10/14 Approved by Acurved IN ITY . BUT Interest Balance Blanc Payable Interest December 31, 2013 2013 December 31, Interest December 31, Lender Rate Payment Terms Collateral 2012 Borrowings Reductions 2013 Paid to 2013 Comments First Commercial 12% Interest only on 25th Inventories $ 50,0001 $300,000- $100,000 $ 250,00011 12/25/13 $2,500 Dividend of $80,000 paid Bank of month, principal 1/31/13 6/30/13 9/2/13 (W/P N3) violates a due in full 1/1/17, provision of the debt agreement, no prepayment which thereby permits lender to penalty demand immediate payment; lander has refused to waive this violation Lander's Capital Prime plus 1 Interest only on last Second mort 100,000+ 50,000- 200,000 12/31/13 Prime rate was 8% to 9% during Corp." day of month, princi gage on Park 2/29/13 the year pal due in full 9. building 3/5/17 15 Gigantic Building 12% $5,000 principal First mortgage 720,000 60,000# 660,000TT 12/5/13 5,64 214 Reclassification entry for current & Loan plus interest due on potion proposed (See RJE-3) Association 5th of month, due in on Park St. building full 12/31/12 J. Lott, majority 0% Due in full Unsecured 300,000+ 100,000 1 200,000 Borrowed additional $100,000 stock holder" 12/31/14 12/31/13 from J. Lott on 1/7/12 $1,170,000 $350,000 260,000 $ 1,310,000 $8,142" THReadded, foots correctly Interest costs from long-term debt Confirmed without exception, WP K-2 Interest expense for year $ 281,333"" "Confirmed with exception, W/P K-3 Average loan balance outstanding $1,406,66755 "Does not recompute correctly Five-year maturities (for disclosure purposes) *Agreed to loan agreement, validated bank deposit ticket, and board of directors' authorization, W/P W-7 Year-end 12/31/14 60,0:00 Agreed to canceled checks and lender's monthly statements 12/31/15 260,000 Ill Agreed to cash disbursements journal and canceled check dated 12/31/13, clearing 1/8/14 12/31/16 260,000 "Traced to working trial balance 1231/17 310,000 Agreed to 12/31/12 working papers 12/31/18 60,000 puro it. Agreed interest rate, term, and collateral to copy of note and loan agreement Thereafter 360,000 "Agreed to canceled check and board of directors' authorization, W/P W-7 $1,310,000 +tt Overall Conclusions Long-term debt, accrued interest payable, and interest expense are correct and complete at 12/31/13. Contemporary and Historical Cases 617