Singer Company has a line of credit with United Bank. Singer can borrow up to $491,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first three months of Year 1. Singer agreed to pay interest at an annual rate equal to 2.50 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, Singer pays 6.00 percent (3.50 percent + 2.50 percent) annual interest on $82,700 for the month of January. Month January February March Amount Borrowed or Prime Rate for the Month 3.50% (Repaid) $82,700 119,800 (17,700) Required Provide all journal entries pertaining to Singer's line of credit for the first three months of Year 1. (Round your final answers to the nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list 3 1 Record the cash borrowed. 2 Record the interest expenses paid. 6 Record the cash borrowed. 4 Record the interest expenses paid. 2.50 3.00 5 Record the repayment of borrowed amount. Record the interest expenses paid. X < Prev Credit > 2 of 4 # Next >
Singer Company has a line of credit with United Bank. Singer can borrow up to $491,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first three months of Year 1. Singer agreed to pay interest at an annual rate equal to 2.50 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, Singer pays 6.00 percent (3.50 percent + 2.50 percent) annual interest on $82,700 for the month of January. Month January February March Amount Borrowed or Prime Rate for the Month 3.50% (Repaid) $82,700 119,800 (17,700) Required Provide all journal entries pertaining to Singer's line of credit for the first three months of Year 1. (Round your final answers to the nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list 3 1 Record the cash borrowed. 2 Record the interest expenses paid. 6 Record the cash borrowed. 4 Record the interest expenses paid. 2.50 3.00 5 Record the repayment of borrowed amount. Record the interest expenses paid. X < Prev Credit > 2 of 4 # Next >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Singer Company has a line of credit with United Bank. Singer can borrow up to $491,000 at any time over the course of the Year 1
calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and
repaid during the first three months of Year 1. Singer agreed to pay interest at an annual rate equal to 2.50 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, Singer pays 6.00 percent (3.50 percent +
2.50 percent) annual interest on $82,700 for the month of January.
Month
January
February
March
1
2
Required
Provide all journal entries pertaining to Singer's line of credit for the first three months of Year 1. (Round your final answers to the
nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account
field.)
View transaction list
3
Amount Borrowed or Prime Rate for the
Month
3.50%
4
(Repaid)
$82,700
5
119,800
(17,700)
Record the cash borrowed.
Record the interest expenses paid.
Record the cash borrowed.
2.50
3.00
Record the interest expenses paid.
Record the repayment of borrowed amount.
6 Record the interest expenses paid.
X
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