On May 15, Larkspur 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 $530.

a. Determine the amount borrowed by Larkspur. (Round intermediate calculations to 6 decimal places, e.g. 1.251241 and final answer to 0 decimal places, e.g. 125.)

Amount borrowed by Larkspur

$

b. Assume the amount borrowed was $15,000. What was the interest rate if the amount of interest owed was $400? (Round intermediate calculations to 6 decimal places, e.g. 1.251241 and final answer to 0 decimal places, e.g. 152.)

Interest Rate

%

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

Date Account Titles and Explanation Debit Credit Initial Borrowing: May 15 Repayment: Sept. 15