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 Prime Rate for Ask or (Repaid) $ 76,600 Month the Month 3.25% 2.25 January February March April Print 119,100 (17,000) 31,000 2.75 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 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 Prime Rate for Ask or (Repaid) $ 76,600 Month the Month 3.25% 2.25 January February March April Print 119,100 (17,000) 31,000 2.75 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 February March April

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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