The following selected transactions were taken from the books of Caledonia Company for 2008. 1.On March 1, 2008, borrowed $50,000 cash from the local bank. The note had a 6 percent interest rate and was due on September 1, 2008. 2.Cash sales for the year amounted to $225,000 plus sales tax at the rate of 7 percent. 3.Caledonia provides a 90-day warranty on the merchandise sold. The warranty expense is estimated to be 2 percent of sales. 4.Paid the sales tax to the state sales tax agency on $190,000 of the sales. 5.Paid the note due on September 1 and the related interest. 6.On October 1, 2008, borrowed $40,000 cash from the local bank. The note had a 7 percent interest rate and a one-year term to maturity. 7.Paid $3,600 in warranty repairs. 8.A customer has filed a lawsuit against Caledonia for $100,000 for breach of contract. The company attorney does not believe the suit has merit. Required 1.Answer the following questions: 1.What amount of cash did Caledonia pay for interest during the year? 2.What amount of interest expense is reported on Caledonia