Exercise 7-11A (Algo) Accounting for a line of credit LO 7-6 Colson Company has a line of credit with Federal Bank Colson can borrow up to $403,500 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 300 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 225 percent (4.25 percent - 3.00 percent) annual interest on $80,400 for the month of January Amount torrowed Prime Rate for Month or (Repaid) January 5 30,400 February (22,000) April 28,300 4.25 117, 100 the Month 4.25 3.25 3.75 March 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 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. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. (Round your answers to the nearest whole dollar.) Interest Paid Month January February March April Required B > 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 ability at the end of each of the first four months Complete this question by entering your answers in the tabs below. Required a Required B Compute 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 End of Month Month January February March April (Required A