LONG - TERM BORROWINGS AND OTHER NOTES PAYABLE
|6 Months Ended|
Mar. 31, 2019
|Debt Disclosure [Abstract]|
|LONG - TERM BORROWINGS AND OTHER NOTES PAYABLE||
5. LONG - TERM BORROWINGS AND OTHER NOTES PAYABLE
Debt assumed from Arcadian
As a result of the acquisition of Arcadian, the Company guaranteed Arcadian's then outstanding debt obligations totaling
$700,000 owed to Ben Franklin Technology Partners of Southeastern Pennsylvania ("BFTP"). The maturity date for the debt is September 30, 2021 and interest accrues at an 8% annual rate. Unpaid interest was $120,500 as of March 31, 2019. The Company recorded the debt at its fair value and recorded a discount of $93,500 as of March 31, 2019 attributable to the difference between the market interest rate and the stated interest rate on the debt. Interest expense related to the accretion of debt discount for the three months ended March 31, 2019 and 2018 was $9,400 and 9,400, respectively. Interest expense related to the accretion of debt discount for the six months ended March 31, 2019 and 2018 was $18,800 and $14,000, respectively.
A balloon payment of $700,000 plus interest will be made on the scheduled maturity date of September 30, 2021.
The changes in carrying amounts of the debt acquired through acquisition for the six months ended March 31, 2019 were as follows:
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef