Franklin Company obtained a $110,000 line of credit from the State Bank on January 1, Year 1. The company agreed to accept a variable interest rate that was set at 2% above the bank's prime lending rate. The bank's prime rate of interest and the amounts borrowed or repaid during the first three months of Year 1 are shown in the following table. Assume that Franklin borrows or repays on the first day of each month. Borrowing is shown as a positive amount and repayments are shown as negative amounts indicated by parentheses. 1-January 1-February 1-Marchi Amount Borrowed Prime Rate for the Month 4.08 Multiple Choice Based on this information alone, the amount of interest expense recognized in March would be closest to: (Do not round intermediate calculations. Round your answer to the nearest whole number.) $177, $309. (Repaid) $ 32,000 (11,000) 32,000 $199. 4.50 5.08
Franklin Company obtained a $110,000 line of credit from the State Bank on January 1, Year 1. The company agreed to accept a variable interest rate that was set at 2% above the bank's prime lending rate. The bank's prime rate of interest and the amounts borrowed or repaid during the first three months of Year 1 are shown in the following table. Assume that Franklin borrows or repays on the first day of each month. Borrowing is shown as a positive amount and repayments are shown as negative amounts indicated by parentheses. 1-January 1-February 1-Marchi Amount Borrowed Prime Rate for the Month 4.08 Multiple Choice Based on this information alone, the amount of interest expense recognized in March would be closest to: (Do not round intermediate calculations. Round your answer to the nearest whole number.) $177, $309. (Repaid) $ 32,000 (11,000) 32,000 $199. 4.50 5.08
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Franklin Company obtained a $110,000 line of credit from the State Bank on January 1, Year 1. The company agreed to accept a variable interest rate
that was set at 2% above the bank's prime lending rate. The bank's prime rate of interest and the amounts borrowed or repaid during the first three
months of Year 1 are shown in the following table. Assume that Franklin borrows or repays on the first day of each month. Borrowing is shown as a
positive amount and repayments are shown as negative amounts indicated by parentheses.
1-January
1-February
1-Marchi
Amount Borrowed Prime Rate for the
Month
4.08
4.58
5.08
Based on this information alone, the amount of interest expense recognized in March would be closest to: (Do not round intermediate calculations.
Round your answer to the nearest whole number.)
Multiple Choice
$177,
$309.
(Repaid)
$ 32,000
(11,000)
32,000
$199.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7093ecba-b133-4717-8763-cf52fea08762%2Fee8ccc3e-39ca-4c44-8828-a32debd56866%2Fmrq88e9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Franklin Company obtained a $110,000 line of credit from the State Bank on January 1, Year 1. The company agreed to accept a variable interest rate
that was set at 2% above the bank's prime lending rate. The bank's prime rate of interest and the amounts borrowed or repaid during the first three
months of Year 1 are shown in the following table. Assume that Franklin borrows or repays on the first day of each month. Borrowing is shown as a
positive amount and repayments are shown as negative amounts indicated by parentheses.
1-January
1-February
1-Marchi
Amount Borrowed Prime Rate for the
Month
4.08
4.58
5.08
Based on this information alone, the amount of interest expense recognized in March would be closest to: (Do not round intermediate calculations.
Round your answer to the nearest whole number.)
Multiple Choice
$177,
$309.
(Repaid)
$ 32,000
(11,000)
32,000
$199.
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