LONG-TERM NOTES PAYABLE

3 Months Ended

Mar. 31, 2012

8. LONG-TERM NOTES PAYABLE

Long-term notes payable consists of the following:

		March 31, 2012		December 31, 2011
Notes payable to unrelated party:

Sea Carrier Shipping Co., Ltd., net of discount of $930,193 and $1,008,078 at March 31, 2012 and March 31, 2011, respectively, due September 25, 2014, fixed repayment of $2,897 per day, monthly payment due one month in advance.	a)	$	1,490,955	$	1,640,544

Sea Carrier Shipping Co., Ltd., net of discount of $1,714,567 and $1,786,679 at March 31, 2012 and 2011, respectively, due March 31, 2016, fixed repayment of $3,718 per day, monthly payment due at the end of each month as amended on April 1, 2011.	b)		3,077,890		3,269,863

Sea Carrier Shipping Co., Ltd., net of discount of $1,714,567 and $1,786,379 at March 31, 2012 and 2011, respectively, due March 31, 2016, fixed repayment of $3,718 per day, monthly payment due at the end of each month as amended on April 1, 2011.	c)		3,077,890		3,269,863

Subtotal			7,646,735		8,180,270

Notes payable to related party:

Rich Forth Investment Limited, due March 31, 2016, at an interest rate of 5.841% on unpaid principal balance per annum, fixed quarterly $215,000 repayment of principal started June 2011, interest payment started June 1, 2010 as amended on April 1, 2011.	b)		3,655,000		3,870,000

Rich Forth Investment Limited, due June 30, 2016, at an interest rate of 5.841% on unpaid principal balance per annum, fixed monthly $122,500 repayment of principal started Q3 2011, interest payment started June 1, 2010 as amended on April 1, 2011.	c)		2,205,000		2,327,500

Subtotal			5,860,000		6,197,500

Total long-term notes payable			13,506,735		14,377,770
Less: Current portion			3,827,500		3,827,500

Long-term portion		$	9,679,235	$	10,550,270

The long-term note denoted a) was used to purchase the vessel Baoshun (see Note 4). The amortization of discount on this long-term note for the three months ended March 31, 2012 and 2011 was $114,038 and $158,065, respectively.

The long-term notes denoted b) were used to build the vessel Fon Tai which was delivered on January 10, 2011. The interest on these long-term notes before the delivery was capitalized and expensed afterwards. The interest on these long-term notes for the three months ended March 31, 2012 and 2011 was $200,313 and $160,461, respectively.

The long-term notes denoted c) were used to build the vessel Rui Lee which was delivered on May 5, 2011. The interest on these long-term notes before the delivery was capitalized and expensed afterwards. The interest on these long-term notes for the three months ended March 31, 2012 and 2011 was $178,905 and $152,441, respectively.

The repayment schedule for long-term notes payable is as follows:

Periods Ended March 31,	Amount
2013	$	3,827,500
2014		3,490,000
2015		3,180,955
2016		2,885,780
2017		122,500
Total	$	13,506,735

- Definition

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.

+ References+ Details

Winland Ocean Shipping Corp 10-Q