On May 15, Holt's 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 $1,200.

Instructions

(a) Determine the amount borrowed by Holt's.

(b) Assume the amount borrowed was $54,000. What was the interest rate if the amount of interest owed was $900?

(c) Prepare the entry for the initial borrowing and the repayment for the facts in part (a).