Back on 6/8/98 an employee took a loan and it slipped through at 7%, but should have been 9.5%. I'm sure we should go back and adjust it. Can we recalculate it and spread the additional interest over the remainder of the loan payments, or do we require the past due interesdt to be paid to-date? These or any other suggestions will be appreciated.

I think it would be considered a PT and subject to a 15% excise tax. You may want to file under VCP for the correction method.