Ferguson company obtained a $95,000 line of credit from the Metropolitan Bank on January 1, 2014. The company agreed to accept a variable interest rate that was set at 2% above the bank’s prime lending rate. The bank’s prime rate of interest and the amount borrowed or repaid during the first three months of 2014 are shown in the following table. Assume that Ferguson borrows or repays on the first day of each month. Borrowing is shown as a positive amount and repayments are shown as negative amounts indicated by parentheses. 

 

The amount of interest expense recognized in March, rounded to the nearest dollar, would be?

• $165.
• $147 
• $257 
• $183

Amount Borrowed Prime Rate of or (Repaid) $26,000 Date Interest January 1 February 1 4.0% (8,000) 26,000 4.5% March 1 5.0%