The cash budget was prepared with the following assumptions:

The Company has borrowed a $500,000 revolving loan on 31 December last year, charging 1% interest per month.

Borrowing should be made to bring the Company to minimum $4,000 cash balance at each month end.

Partially loan repayment should be made whenever there is any excess cash. Borrowing and repayment of the loans should be in multiples of $1,000. It is assumed that borrowing occurs at the beginning of the month while loan repayment is made at the end of the month.

Cash Budget	Jan
Beginning cash balance	44,000
Cash receipts and disbursements:
Collections from customers	49,000
Payments to suppliers	(45,000)
Payments for operating expense	(13,000)
Excess (deficiency) of cash before financing	35,000

calculate the Jan amount of the followings IF Interest is paid at every month end.

a) borrowing / repayment;

b) the interest expense