- 17 -
At no time did Mr. Whitehead make any payments to Mr.
Stanford on the promissory note that Mr. Whitehead signed on
September 13, 1991, in exchange for Mr. Whitehead’s purchase of
all of Mr. Stanford’s Burien Nissan stock. As discussed above,
Burien Nissan continued to make monthly payments of $2,000 to Mr.
Stanford from April 1995 until at least September 1999. Neither
Mr. Whitehead nor Burien Nissan expected Mr. Whitehead to repay
those amounts to Burien Nissan.
A document dated May 31, 1996, entitled “Burien Nissan, Inc.
Adjusting Journal Entries for the period ended December 31,
1995",9 showed, inter alia, the following entries (AJE 15 en-
tries) under the heading “AJE 15":
Account # Account Name/Description Debits Credits
3440 Note Payable-Ken Stanford 178,000
3910 Retained Earnings 178,000
To record note payable on
capital stock redeemed
Petitioners’ Respective Uses of
Certain Burien Nissan Automobiles
During the years at issue, neither Mr. Whitehead nor Ms.
Whitehead owned an automobile. During each of those years, each
petitioner had the use of, and did use, certain automobiles owned
by Burien Nissan (Burien Nissan automobiles). During the years
at issue, petitioners did not pay Burien Nissan for their respec-
tive uses of certain Burien Nissan automobiles.
9The record does not disclose who prepared that document.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011