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19. As of December 31, 2014, Microchip International Corporation (MIC) had four long-term debt facilities as follows: I' Debt facility 1: An unsecured line of
19. As of December 31, 2014, Microchip International Corporation (MIC) had four long-term debt facilities as follows: I' Debt facility 1: An unsecured line of credit totaling $50 million with a New York bank that matures on June 1 of each year, with interest rates that float according to the LIBOFt. \\J i Debt facility 2: A long-term note payable at 6% interest with a $10 million balance outstanding as of December 31, 2014. Interest and principal payments of $100,000 are due quarterly on February 1, May 1, August 1 and November 1. Debt facility 3: A bond payable at 7% interest that matures on September 1, 2017. Interest payments are due quarterly on March 1, June 1, September 1 and December 1. Debt facility 4: A mortgage note payable at 6% interest. Principal payments of $50,000 and interest are due quarterly on January 1, April 1, July 1 and October 1. The note is secured by a building and production facility located in Orange County, California. All facilities have \"events of default" that allow the creditor to accelerate payment or waive the default provisions, depending on the circumstances. It is January 15, 2015, and the following events have occurred around year-end. The controller has asked you to investigate each of the following issues and report back to him as soon as possible: t> Debt facility 1: The unsecured line of credit for $50 million has been classified as long-term debt. It is the intention of management to roll over the facility at June 1, 2015, for another 12- month period. T: Debt facility 2: The accountant who had the responsibility to ensure the correct recording of interest and to prepare the initial journal entries for the accruals on the notes payable neglected
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