On May 15, Gott's Outback Clothiers borrowed some money on a 4-month note to provide cash during the slow season of the year. The interest rate on the note was 8%. At the time the note was due, the amount of interest owed was $480.

Instructions

1. Determine the amount borrowed by Gott's.
2. Assume the amount borrowed was $18,500. What was the interest rate if the amount of interest owed was $555?
3. Prepare the entry for the initial borrowing and the repayment for the facts in part (a).