Notes payable and debt schedules review
Reviewing the Simmons term loan, development notes, the Saxonwald facility, accrued interest consolidation, and the unused credit line.
The reviewer's view of the debt schedules. For the underlying loan detail — customer numbers, loan IDs, rates, and balances — see Debt schedules.
Source: Rackson_RRS_RCY_Review_Process.docx sections 21, 27.8, and 43.2.
Simmons Bank term loan
- The client (Mike) provides the debt schedule. PBI does not independently maintain or recalculate the amortization.
- PBI's main task each period is to accrue interest, since loan payments often lag by a month — interest is accrued over the month even though the cash payment follows later.
For roughly the past two periods, the principal/interest split actually reflected on the lender's statements has diverged from the split shown on the client's original amortization schedule. Mike has been updating his schedule to match what the statements actually show, and PBI reports off the updated, statement-driven schedule — not the original projection.
As part of the bank reconciliation process, the preparer records loan payments throughout the month as she works the bank rec, so the principal/interest split is captured in real time rather than reconstructed at period end.
Development notes
A set of development notes tied to individual new-store openings were originally structured as a single combined note, but have since been 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 shows up as the original combined note account alongside a series of individual note accounts identified by store in the account description — which is what allows the individual notes to be tied back to a specific location.
Like the term loan, several of these individual notes have required manual reclasses between principal and interest when the lender's actual statement split diverged from the original schedule.
Saxonwald facility
A separate, non-bank financing facility, tracked via a dedicated tracker file the client sends monthly — and more frequently mid-period if there is a change, such as an additional draw.
No payments are currently being made on this facility. PBI is only accruing interest, not recording payments, and reporting is limited to what is on the balance/tracker rather than a detailed amortization build.
The source recording refers to this as "Saxon Wall" — an auto-transcription artifact of Saxonwald.
Accrued interest consolidation
Accrued interest across the Simmons Bank 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.
Unused credit line
A small number of items — approximately four, as of the review — still need to be reviewed relating to an unused credit line.
These sit on the list for the next quarterly review, not the current monthly close.
Current portion of long-term debt (GL 27910)
A reclass off the note payable/debt schedules. Confirm the current-portion split is refreshed each period as balances amortize, rather than left at a prior period's static split.
Step-by-step checklist
Simmons Bank term loan, development notes, and the Saxonwald tracker. Roll forward the prior schedule if not.
On the term loan and development notes, based on the actual lender statement split rather than the original amortization schedule if the two have diverged.
That loan payments recorded during the month carry the correct principal/interest split.
Update the balance and accrue interest. Confirm no payments were recorded unless the client has indicated otherwise.
Into the single accrued-interest schedule and tie to the GL.
To the next quarterly cycle.
RCY (Dave's) — loan schedule notes
The loan / "term code" schedule for Dave's is described as straightforward relative to the RRS debt schedules. The main things to watch:
Day-count timing differences. Being off by a day or two changes the interest calculation by roughly eight dollars or more per day, depending on the balance.
Plus the handful of items still needing review related to the unused credit line, above.
On the close checklist, Loan Statement Reconciliation & SWAP is a WD3 task.
Related
- Debt schedules — the consolidated loan detail across both entities
- RRS utilities and interest workpapers — the 24700 accrued interest and 28015/28020 CONA tracking steps
- RCY debt and notes workpapers — the Simmons and Saxonwald preparer steps