New York Codes, Rules and Regulations › Title 9 - EXECUTIVE DEPARTMENT › Subtitle S - Division of Housing and Community Renewal › Chapter III - Low Rent Housing › Subchapter D - Accounting Manual For Public Housing Agencies › Part 1644 - Debt Service › Subpart 1644-2 - Debt Service Prior To Issuance Of Housing Bonds › Section 1644-2.5 - Premium on temporary loan notes

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
						Premiums received from purchasers of temporary loan notes issued by the local
						agency in amounts of less than $100 will be credited directly to the
						appropriate interest cost or expense account, the date of issue of the
						temporary loan notes being the determining factor as to whether the credit will
						be to development or operations. Thus, if the date of issue of the temporary
						loan notes is prior to the date of substantial completion, the premium thereon,
						if under $100, is credited, through the cash receipts register, directly to
						account 1420.1, Interest. Similarly, if the date of issue of the temporary loan
						notes is subsequent to the date of substantial completion, the premium thereon,
						if under $100, is credited, through the cash receipts register, directly to
						account 4716, Interest on Indebtedness.
(b) Where the premium received is in the
						amount of $100 or more, the premium should be set up as a deferred credit and
						amortized pro rata over the life of the temporary loan note to the appropriate
						interest cost or expense account. The write-offs should be made by journal
						voucher at the end of each calendar quarter. The entries should be recorded, as
						follows:
(1) Premium deposited in project's
						bank account. The accounting entries are as follows:
Entry (1): Through cash receipts register at time cash
						  is received:
Dr. Account 1111--Development Fund or
Dr. Account 1112--Administration Fund
Cr. Account 2230--Premium on Temporary Loan
						  Notes
Note:Entry (1) records the receipt of the premium in
						  cash.
Entry (2): Through journal voucher for the quarterly
						  pro rata write-off:
Dr. Account 2230--Premium on Temporary Loan
						  Notes
Cr. Account 1420.1--Interest or
Cr. Account 4716--Interest on Indebtedness
Note:Entry (2) credits the appropriate interest cost or
						  expense account with a pro rata portion of the premium applicable to the
						  period.
(2) Premium
						retained by the escrow agent. The accounting entries are as follows:
Entry (1): Through the journal voucher at the time the
						  funds are re-
ceived by the escrow agent, who retains the premium and
						  invests the funds so that they are available to pay interest at the date of
						  maturity of the temporary loan notes:
Dr. Account 1115--Special Deposits
Cr. Account 2230--Premium on Temporary Loan
						  Notes
Entry (2): Through journal voucher for the quarterly
						  pro rata write-off:
Dr. Account 2230--Premium on Temporary Loan
						  Notes
Cr. Account 1420.1--Interest or
Cr. Account 4716--Interest on
						  Indebtedness
(3) Where the
						premium on temporary loan notes is in the amount of $100 or more, the
						allocation of the write-off credits, and the cutoff dates, to the project
						proper and the related programs shall follow the same rules applicable to the
						interest charge. The effect will be that the appropriate interest cost or
						expense accounts will reflect the net interest charge for the period, after
						credit for the premium.