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Line of Credit Modification As of December 31, 20X3, Shakespeare had a line of credit with a bank of $8 million (with a $10 million
Line of Credit Modification As of December 31, 20X3, Shakespeare had a line of credit with a bank of $8 million (with a $10 million maximum amount available) due approximately three years from the balance sheet date. Interest accrues on amounts drawn under the line at the London Interbank Offered Rate (LIBOR) (subject to a 3.5 percent floor) plus 7.5 percent per year. Shakespeare is also required to pay a commitment fee equal to 2 percent per year on the portion of the line of credit that was not drawn upon. On March 1, 20X4, the Company completed its modification of the terms of the line of credit with the bank to finance the acquisition of a competitor printing and publishing company (see further facts of the acquisition below). The key modified terms are as follows: The maximum amount available under the line of credit was increased from $10 million to $20 million. The term was extended another three years past the original due date (i.e., now due in approximately six years from the balance sheet d
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