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receivables without the bank's consent as a condition of renewing
Winery's line of credit. Furthermore, all accrued and unpaid
interest owed to Vineyards was eliminated from Winery's books at
the end of 1986 and was never paid to Vineyards.
No interest accrued on Vineyards' receivables for the
remainder of the time that Winery dealt with Bank of America.
The Grape Payment Calculation executed by Winery and Vineyards
during 1986, however, provided that Vineyards would be paid
interest at the rate of 10 percent on its receivables from Winery
for grape purchases. During November 1988, Winery obtained a
line of credit from Napa National Bank, which allowed interest on
the receivables to be accrued and paid quarterly. The following
table summarizes the accrual and payment of interest to Vineyards
on its receivables from Winery for grape purchases from 1982
through 1990:
Year Interest Accrued Interest Paid Balance
1982 $4,202 $0 $4,202
1983 24,388 0 28,590
1984 50,729 7,017 72,302
1985 57,819 49,419 80,702
1986 (79,739) 963 0
1987 0 0 0
1988 80,616 80,616 0
1989 100,339 100,339 0
1990 128,047 128,047 0
Rent Payments by Winery to Vineyards
The land at the Oakcross Vineyard that was used for the
crush pad was rented by Winery from Vineyards for $18,000 per
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