Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year.

		Cash Receipts	Cash payments
January	$	527,000		$	474,900
February		412,500			360,400
March		476,000			524,000

According to a credit agreement with its bank, Kayak requires a minimum cash balance of $40,000 at each month-end. In return, the bank has agreed that the company can borrow up to $160,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1.

monthly cash budgets for January, February, and March

March KAYAK COMPANY Cash Budget For January, February, and March January February Beginning cash balance $ 40,000 $ 40,000 Cash receipts 527,000 412,500 Total cash available 567,000 452,500 Cash payments 474,900 360,400 Interest expense Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance Loan balance - Beginning of month $ 80,000 Additional loan (loan repayment) Loan balance - End of month $ 0