Bdidgeport Company has a line of credit with National Bank Bridgeport can borrow up to...
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Accounting
Bdidgeport Company has a line of credit with National Bank Bridgeport can borrow up to $1,160,000 at any time over the course of the hear 1 calendar year, The following table shows the prime rate expressed as an annual percentage, olong with the amounts borrowed and repoid during the first two months of Year 1. Eridgeport agreed to pay interest at an annual rate equal to 1 percent above the banks prime rate. Funds are borrowed or repoid on the first day of each month. Interest is payable in cash on the last doy of the moath. The interest rate is applied to the outstanding monthly balance. For example. Bridgeport pays 4 percent ( 3 percent +1 percent) annual interest on $169200 for the month of January. Required: Compute the amount of (a) interest paid and (b) Bridgeport's liability balonce of the end of each of the first two months
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