Song Co. uses an approved line of credit not to exceed $250,000 with the local bank to provide short-term financing for its business operations. Song either borrows or repays funds on the first day of a month. Interest is payable monthly at the bank's prime interest rate plus 1 percent. The following table shows the amounts borrowed and repaid for 2010 along with the bank's prime interest rate.

Required
a. Show the effects of these transactions on the financial statements using a horizontal statements model like the one shown here. Use a + to indicate increase, a – for decrease, and NA for not affected. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA).

b. What is the total amount of interest expense paid for2010?

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Amount Borrowed or (Repaid) 70,000 $40,000 (20,000) (10,000) (20,000) 10,000) Prime Rate for the Month. % Month January February March April May June July-0ctober November December 4.5 4.5 40,000 20,000) 5.25 Assets Liab. Equity Rev. ExpNet Inc.Cash Flow