Brief Exercise 7-6 (Algo) Calculations for a line of credit LO 7-6\ Bridgeport Company has a line of credit with National Bank. Bridgeport can borrow up to

$1,320,000

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 af 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

$188,400

for the month of January.

Brief Exercise 7-6 (Algo) Calculations for a line of credit LO 7-6 Bridgeport Company has a line of credit with National Bank. Bridgeport can borrow up to $1,320,000 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 af 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 $188,400 for the month of January