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and subsequent years at a specified market rate and to debit the
interest so calculated to the YOC-Elvin Account.
The November 17, 1986, $325,939 transaction referred to in
the above schedule for 1986 warrants further explanation. On
July 28, 1983, Elvin and Charles R. Koons (Koons) formed North
River Development Corp. (NRDC) as a Florida corporation to open a
new Chrysler-Plymouth dealership. Elvin and Koons each owned 50
percent of NRDC's outstanding stock.
On November 17, 1986, in order to provide funds for the
purchase of real property that was located one block from the YOC
dealership and that would serve as the site of the new Chrysler-
Plymouth dealership, YOC transferred $325,939 to an escrow
account to provide one-half of the funds necessary for purchase
of the real property. As a result of this transfer, the
outstanding debit balance in the YOC-Elvin Account was increased
by $325,939.
No representative of NRDC, nor Elvin, executed any loan
documents or promissory notes in connection with this use of
$325,939 of YOC's funds to purchase the real property. The real
property that was purchased was titled in the name of NRDC.
In 1987, YOC's outside accounting firm reclassified on YOC's
books the $325,939 debit to the YOC-Elvin Account related to the
above transaction as a debit to a new YOC account receivable
reflecting a debt owed by NRDC to YOC. It is not clear in the
record who requested the accounting firm to make this change.
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