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Check my work 11 Colson Company has a line of credit with Federal Bank. Colson can borrow up to $458,000 at any time over the course of the 2018 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of 2018. Colson agreed to pay interest at an annual rate equal to 3.00 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6.25 percent (3.25 percent + 3.00 percent) annual interest on $76,600 for the month of January. eBook Hint Amount Borrowed or (Repaid) $ 76,600 Prime Rate for Ask Month the Month 3.25% January February Print 119,100 (17,000) 31,000 2.25 March 2.75 April 3.25 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of 2018. (Round answers to nearest whole dollar.) Month Interest Paid January $ 399 February 856 March April Check my work 11 nearest whole dollar.) Month Interest Paid January 399 eBook February 856 Hint March April Ask Print b. Compute the amount of Colson's liability at the end of each of the first four months. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.) Balance End of Month Month January 76,600 February March April

Check my work 11 Colson Company has a line of credit with Federal Bank. Colson can borrow up to $458,000 at any time over the course of the 2018 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of 2018. Colson agreed to pay interest at an annual rate equal to 3.00 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6.25 percent (3.25 percent + 3.00 percent) annual interest on $76,600 for the month of January. eBook Hint Amount Borrowed or (Repaid) $ 76,600 Prime Rate for Ask Month the Month 3.25% January February Print 119,100 (17,000) 31,000 2.25 March 2.75 April 3.25 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of 2018. (Round answers to nearest whole dollar.) Month Interest Paid January $ 399 February 856 March April Check my work 11 nearest whole dollar.) Month Interest Paid January 399 eBook February 856 Hint March April Ask Print b. Compute the amount of Colson's liability at the end of each of the first four months. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.) Balance End of Month Month January 76,600 February March April

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Check my work 11 Colson Company has a line of credit with Federal Bank. Colson can borrow up to $458,000 at any time over the course of the 2018 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of 2018. Colson agreed to pay interest at an annual rate equal to 3.00 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6.25 percent (3.25 percent + 3.00 percent) annual interest on $76,600 for the month of January. eBook Hint Amount Borrowed or (Repaid) $ 76,600 Prime Rate for Ask Month the Month 3.25% January February Print 119,100 (17,000) 31,000 2.25 March 2.75 April 3.25 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of 2018. (Round answers to nearest whole dollar.) Month Interest Paid January $ 399 February 856 March April
Transcribed Image Text:Check my work 11 Colson Company has a line of credit with Federal Bank. Colson can borrow up to $458,000 at any time over the course of the 2018 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of 2018. Colson agreed to pay interest at an annual rate equal to 3.00 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6.25 percent (3.25 percent + 3.00 percent) annual interest on $76,600 for the month of January. eBook Hint Amount Borrowed or (Repaid) $ 76,600 Prime Rate for Ask Month the Month 3.25% January February Print 119,100 (17,000) 31,000 2.25 March 2.75 April 3.25 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of 2018. (Round answers to nearest whole dollar.) Month Interest Paid January $ 399 February 856 March April
Check my work 11 nearest whole dollar.) Month Interest Paid January 399 eBook February 856 Hint March April Ask Print b. Compute the amount of Colson's liability at the end of each of the first four months. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.) Balance End of Month Month January 76,600 February March April
Transcribed Image Text:Check my work 11 nearest whole dollar.) Month Interest Paid January 399 eBook February 856 Hint March April Ask Print b. Compute the amount of Colson's liability at the end of each of the first four months. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.) Balance End of Month Month January 76,600 February March April
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