How much do I owe for the cost of building my new offices and the startup losses that were generated during the first months of operation?
On the balance sheet, look at the Liabilities section. In that section, you will usually find two line items – “Cash Advances from Orthodontic Centers” and “Accrued Interest on Cash Advances.” The Cash Advances from Orthodontic Centers represents the total debt on the practice as a result of construction costs and startup losses. The Accrued Interest on Cash Advances represents the interest cost that has accumulated on these startup losses (interest is assessed at a rate of 1.5% over the prime rate of interest on the average outstanding balance of the Cash Advances from Orthodontic Centers). Add these two amounts together to get the total debt outstanding plus interest.
