Page 19 - 2019 - 2020 Child Care Resource Center Audited Financial Statements

CCRC makes monthly principal and interest payments of $38,422 from October 1, 2017 to September 1, 2032. The mortgage loan payable bears a fixed annual interest rate equal to 3.5% from October 1, 2017 to August 31, 2027, and will be adjusted thereafter based on the five-year treasury maturity rate as set by the Federal Reserve Bank plus 2.5% from September 1, 2027 to September 1, 2032. CCRC is also subject to various affirmative and negative covenants. The loan is secured by the acquired property.
Scheduled payments of principal on the mortgage loan for the future years are as follows:
Years Ending June 30,
2021 $ 2022
2023
2024
2025
Thereafter
$
Note 8 – Fair Value of Measurement of Investments
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following three levels of inputs that may be used to measure fair value:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs which are supported by little or no market activity.
CCRC invests in various investment securities. Investment securities are exposed to various risk factors such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the value of investment securities will occur in the near term and that such changes could materially affect investment balances and the amounts reported in the statements of financial position.
The following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying statements of financial position as of June 30, 2020 and 2019, as well as the general classification of such instruments pursuant to the valuation hierarchy.
Child Care Resource Center, Inc. Notes to Financial Statements
Note 7 – Debt (continued)
326,349 365,712 350,315 362,687 379,033
2,160,296 3,944,392
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