Colson Company has a line of credit with Federal Bank. Colson can borrow up to $386,000 at any time over the course of thecalendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed andrepaid during the first four months of the year. Colson agreed to pay interest at an annual rate equal to 2.50 percent above the bank'sprime 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. Theinterest rate is applied to the outstanding monthly balance. For example, Colson pays 6.25 percent (3.75 percent + 2.50 percent)annual interest on $81,000 for the month of January.MonthJanuaryFebruaryMarchAprilRequired AAmount Borrowedor (Repaid)$ 81,000117,900(24,400)27,600Requireda. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year.b. Compute the amount of Colson's liability at the end of each of the first four months.Complete this question by entering your answers in the tabs below.MonthJanuaryFebruaryMarchAprilPrime Rate forthe MonthRequired B3.75%2.753.253.75Compute 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 Endof Month< Required A Colson Company has a line of credit with Federal Bank Colson can borrow up to $386,000 at any time over the course of thecalendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed andrepaid during the first four months of the year. Colson agreed to pay interest at an annual rate equal to 2.50 percent above the bank'sprime 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. Theinterest rate is applied to the outstanding monthly balance. For example, Colson pays 6.25 percent (3.75 percent + 2.50 percent)annual interest on $81,000 for the month of JanuaryJanuarry:FebruaryMarchRequired AAmount Borrowedor (Repaid)$81,000117,900(24,400)27,600Requireda. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year.b. Compute the amount of Colson's liability at the end of each of the first four monthsMonthComplete this question by entering your answers in the tabs below.JanuaryFebruaryMarchAprilPrime Rate forthe MonthRequired B3.75%2.753.253-753Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. (Round youranswers to the nearest whole dollaraInterest PaidRequired B >

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 30P

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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $8,264.70 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
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Colson Company has a line of credit with Federal Bank. Colson can borrow up to $362,500 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 four months of Year 1. Colson agreed to pay Interest at an annual rate equal to 1.50 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, Colson pays 6.00 percent (4.50 percent +1.50 percent) annual Interest on $78,000 for the month of January. Prime Rate Amount Borrowed or (Repaid) for the Month January February Month $ 78,000 4.50% 119,500 3.50 (15,400) 26,800 4.00 4.50 March April Required: a. Compute the amount of Interest that Colson will pay on the line of credit for the first four months of Year 1. Note: Do not round…
Colson Company has a line of credit with Federal Bank. Colson can borrow up to $436,000 at any time over the course of the 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 the year. Colson agreed to pay interest at an annual rate equal to 2.00 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 (4.25 percent +2.00 percent) annual interest on $77,700 for the month of January. Amount Borrowed Prime Rate for the Month Month January February March April or (Repaid) $ 77,700 4.25% 120,700 (16,500) 28,400 3.25 3.75 4.25 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. b. Compute the amount of…
Colson Company has a line of credit with Federal Bank. Colson can borrow up to $407,000 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 four months of Year 1. Colson agreed to pay Interest at an annual rate equal to 2.00 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 (4.25 percent - 2.00 percent) annual Interest on $83,300 for the month of January. Month January February Month January February March April March April Required: a. Compute the amount of Interest that Colson will pay on the line of credit for the first four months of Year 1. Note: Do not round intermediate calculations. Round your final answers to the nearest whole…
Colson Company has a line of credit with Federal Bank, Colson can borrow up to $386,000 at any time over the course of the 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 the year. Colson 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, Colson pays 6.25 percent (3.75 percent + 2.50 percent) annual interest on $81,000 for the month of January. Month January February March April Amount Borrowed or (Repaid). $ 81,000 117,900 (24,400) 27,600 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. b. Compute the amount of Colson's liability at the end of each of the first…
Bridgeport Company has a line of credit with National Bank. Bridgeport can borrow up to $1,040,000 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 two months of Year 1. Bridgeport agreed to pay interest at an annual rate equal to 1 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, Bridgeport pays 4 percent (3 percent + 1 percent) annual interest on $154,800 for the month of January. Month January February Month Amount borrowed or (repaid) January February $154,800 (31,600) Required: Compute the amount of (a) interest paid and (b) Bridgeport's liability balance at the end of each of the first two months. Prime rate for the (a) Interest Paid month 3% 3.5% (b)…
Colson Company has a line of credit with Federal Bank. Colson can borrow up to $800,000 at any time over the course of the 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 the year. Colson agreed to pay interest at an annual rate equal to 2 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 percent (4 percent + 2 percent) annual interest on $80,000 for the month of January. Month January February March April Amount Borrowed or (Repaid) $ 80,000 50,000 (30,000) 20,000 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. b. Compute the amount of Colson's liability at the end of each of the first four months.…
Colson Company has a line of credit with Federal Bank. Colson can borrow up to $315,500 at any time over the course of the 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 the year. Colson agreed to pay interest at an annual rate equal to 2.00 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 (4.25 percent + 2.00 percent) annual interest on $76.000 for the month of January. Month January February March April Amount Borroed or (Repaid) $ 76,000 121,200 (20,900) 27,500 Prime Rate for the Month 4.25% 3.25 3.75 4.25 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. b. Compute the amount of…

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Complete this question by entering your answers in the tabs Required A Required B Compute the amount of Colson's liability at the end of each of the fir Round your final answers to the nearest whole dollar.) Month January February March April Balance End of Month < Required A