Cordes Finance Corporation - Page 4

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                worthy, petitioner would issue a check to the dealership                                 
                for the purchase price of the car, and the customer would                                
                issue a promissory note to petitioner under which the                                    
                customer would agree to pay the principal amount of the                                  
                note plus interest.  Payment of the customer's promissory                                
                note was secured by a mortgage on the automobile that was                                
                being financed.                                                                          
                      Petitioner's employees maintained a ledger card for                                
                every lending transaction.  Each ledger card contained the                               
                customer's name, the vehicle identification number of the                                
                automobile that was being financed, the principal amount of                              
                the loan, and the total interest that would accrue during                                
                the life of the loan.  During the life of the loan,                                      
                petitioner's employees would record the date and amount of                               
                each payment on the appropriate ledger card.  Petitioner                                 
                did not maintain a list of all loans outstanding, and                                    
                there was no way of knowing if a ledger card was lost or                                 
                misplaced, unless the borrower subsequently made a payment                               
                on the loan.                                                                             
                      Since its inception as a finance company in 1964,                                  
                through and including the year in issue, petitioner has                                  
                used the same method of accounting to record loan                                        
                transactions on its books and records.  At the time                                      
                petitioner made a loan, petitioner's employees debited                                   
                petitioner's "Loan Receivable" account in an amount equal                                




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Last modified: May 25, 2011