- 11 - entries on Sidal’s adjusted trial balance for its taxable year ending December 31, 2000, show 2000 principal and interest payments on those loans of $67,213 and $111,175, respectively. 1999 On April 20, 1999, Paulan borrowed $250,000 from Bavaria, Inc., a C corporation, the stock of which is wholly owned by Robert and Lovella. On December 31, 1999, Paulan used the proceeds of that loan to write a check to Sidal for $250,000. On November 12, 1999, Paulan borrowed $525,000 from Civitas Bank. That loan was secured by certain marketable securities and guaranteed by Robert and Lovella. On November 17, 1999, Paulan used the proceeds of that loan to write a check to Sidal for $525,000. Although both Paulan’s and Sidal’s general ledgers for 1999 reflect the two advances as resulting in a $775,000 payable from Sidal to Paulan, adjusting entries were made on both entities’ adjusted trial balances for the taxable year ending December 31, 1999, to change the $775,000 from a note payable by Sidal to Paulan to notes for $125,000 and $262,500 payable by Sidal to each petitioner and receivables by Paulan from each petitioner.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011