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Year Ended: Sept. 30, 1989 Sept. 30, 1990
Beginning Balance $ 757,530 $1,082,602
Advances to Georgiou 857,360 2,608,562
Repayments (532,000)1 (1,700,909)2
Ending Balance $1,082,602 3 $1,990,256 3
1The 1989 repayments consisted of one check for $325,000
dated 9/3/89 and a journal entry of $207,000 that represented an
offset of rents that Kolonaki owed Georgiou on the rental of a
building owned by Georgiou (the amount was reported on Georgiou's
Form 1040).
2The 1990 repayments consisted of three journal entries:
$1,186,000 "to record investment in Judy Alexander [JAI] as of
10/1/89 for consolidation purposes" (the entry was actually made
in April or May 1991); $312,161 "to record Kolonaki loan to
Alexia as of 10/1/89"; and $115,000 that stated "George paid the
monies to Alexia for Kolonaki's purchase."
3The errors in calculations are from Kolonaki's journal and
from rounding.
No promissory notes were executed for the advances from
Kolonaki's Account 121--Loan to Shareholder from 1980 through the
years in issue. No maturity date was set for repayment of the
advances. Georgiou did not pledge any collateral as security for
the repayment of the advances from 1980 through 1990. Kolonaki
did not take any action to enforce the repayment of the amounts
advanced to Georgiou. However, a March 28, 1991, letter from
Bernard to Georgiou stated:
Enclosed please find an original and one copy each
of Security Agreement, Consent by Directors to
Corporation Action dated June 30, 1988 and Consent by
Directors to Corporate Action dated June 30, 1989.
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