Debt schedules
The RRS CONA term loan, DDTLs and interest rate SWAP, and the RCY Simmons loans and Saxonwald PIK promissory notes.
Debt tracking splits by entity: the CONA facility on the RRS side and Simmons plus the Saxonwald related-party notes on the RCY side.
Source: Rackson Exec Summary.docx section 9, Rackson_Workpaper_Instructions.docx (RRS Utilities & Interest, RCY Debt & Note Tracking), and Rackson_RRS_RCY_Review_Process.docx sections 21 and 43.
For roughly two periods, the principal/interest split on the lender's statements has diverged from the client's original amortization schedule. Mike updates his schedule to match what the statements actually show — PBI reports off the updated, statement-driven schedule, not the original projection. This applies to both the term loan and several individual development notes.
RRS — CONA term loan and DDTLs
Owner: Maureen · Accounts: 28015 (term loan) / 28020 (DDTLs) / 24700 (accrued interest) / 18300 (SWAP)
| Detail | Value |
|---|---|
| Customer # | 70649073 |
| Commitment | B1-4000465232 |
| Loan ID | B1-101604112 |
| Beginning balance | $45,000,000 |
| Principal payments | $281,250 quarterly, beginning 4/1/2025 |
| Rate | SOFR margin 4.25% + 3-month SOFR (~4.29%) = effective ~8.54% |
- Update the SOFR column whenever a new rate notice is received.
- Accrued interest = (Last Payment Amount ÷ Days in Statement Period) × Accrued Days, posting to 24700.
- The interest rate SWAP is marked to the Capital One daily mark PDF statement each period, tracked to 18300. Discuss with Mike whether the SWAP is mark-to-market or hedge-accounted before recording a fair value adjustment.
Deferred financing costs
CONA term loan closing costs of $1,358,800 amortize over 5 years — straight-line at $22,646.67 per period (2026 rate), to accounts 17910 (accumulated amortization) / 17600 (net asset). No updates needed unless the loan is modified or refinanced. A historical ~15-cent rounding difference is known and is not a concern.
RCY — Simmons term loan and DDTLs
Owner: Betsy (per the transition summary) / Maureen (per the workpaper instructions) — confirm current owner.
| Detail | Value |
|---|---|
| Customer # | RAE1101 |
| Term loan ID | 70177332 (originally $7,000,000) |
| DDTL — store 1418 Hamden | 701773401 |
| DDTL — store 1232 Yonkers | 701773402 |
| DDTL — store 1354 Brookfield | 701773403 |
Each statement received (term loan or any DDTL) is entered into its corresponding tab — Term, DDTL 1418, DDTL 1232, DDTL 1354 — with statement date, balance, principal paid, interest paid, total payment, and resulting end balance.
The term loan and each DDTL may carry different rates. Update the rate column if a new rate notice has been received from Simmons.
For DDTL 1232 (Yonkers) and DDTL 1354 (Brookfield), confirm each period whether the loan is still in the draw / interest-only phase or has converted to principal-and-interest amortization — the payment structure changes once amortization begins. Cross-reference the original DDTL agreement for the conversion date.
If a statement date does not align with period end, accrue interest using the same days-elapsed methodology as the CONA loan (the 24700 logic) and post a GJ accrual.
RCY — Saxonwald promissory notes
Owner: Betsy / Maureen · Ten PIK-interest related-party notes, aggregate principal ~$9.3M
PIK (paid-in-kind) interest accrues into principal rather than being paid in cash, compounding into the note balance each period.
For each note tab (Note 1 through Note 10, dated by funding date): beginning balance × the note's annual PIK rate × (days in period ÷ days in year).
Each note may carry a different rate and maturity date — refer to the header block at the top of each tab (Principal Loan Amount, Annual Interest Rate (PIK), Funding Date, Maturity Date).
All interest is PIK and compounds into the Ending Note Balance, which becomes the following period's Beginning Balance.
If any note has been amended (per the amendment references in the Maturity Date note column), confirm the current rate and maturity reflect the most recent amendment before calculating the accrual.
On the Consolidated Note Schedule tab, confirm the aggregate Beginning Balance, Total Interest, and Ending Note Balance sum correctly from all ten note tabs. The Check Calc column on each note tab validates that note's math — confirm it nets to $0 or the documented rounding tolerance.
DR Interest Expense / CR Notes Payable — Saxonwald, using the aggregate Total Interest from the Consolidated Note Schedule. Confirm the Intacct GL balance agrees to the Ending Note Balance.
The review walkthrough refers to this facility as "Saxon Wall" — an auto-transcription artifact of "Saxonwald." No payments are currently being made; PBI is only accruing interest, and reporting is limited to the tracker balance rather than a detailed amortization build. The client sends the tracker monthly, and more frequently mid-period if there is a change such as an additional draw.
Development notes
A set of development notes tied to individual new-store openings were originally structured as a single combined note, then split out and tracked as individual notes by store for visibility — even though they all trace back to one original note number on the trial balance.
On the trial balance this appears as the original combined note account alongside a series of individual note accounts identified by store in the account description, which is what allows each note to be tied back to a specific location. Like the term loan, several of these have required manual reclasses between principal and interest when the lender's actual statement split diverged from the original schedule.
Accrued interest consolidation
Accrued interest across the Simmons term loan, the development notes, and the Saxonwald facility is consolidated by Betsy into a single accrued-interest schedule each period, pulling from the last three or four periods of activity as needed to true up the running balance.
Current portion of long-term debt (GL 27910) is a reclass off these schedules — confirm the current-portion split is refreshed each period as balances amortize, rather than left at a prior period's static split.
Watch-outs
The RCY loan schedule is straightforward relative to RRS, but being off by a day or two changes the interest calculation by roughly eight dollars or more per day depending on the balance.
As part of the bank reconciliation process, the preparer records loan payments throughout the month so the principal/interest split is captured in real time rather than reconstructed at period end.
A small number of items relating to an unused credit line still need review. These sit on the next quarterly review, not the current monthly close.
Jeff has been the point person on RCY debt documents. Confirm directly whether that continues post-departure or whether Betsy fully absorbs it — get it in writing so there is no gap at the next debt reconciliation.
Related
- RRS utilities and interest workpapers — the 24700 and 28015/28020 workpaper steps
- RCY debt and note tracking workpapers — the Simmons and Saxonwald workpaper steps
- Debt and notes review — the reviewer's checklist