Barton Company has a line of credit with Sea View Bank. Barton can...
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Barton Company has a line of credit with Sea View Bank. Barton can borrow up to $200,000 at any time over the course of Year 2. The following table shows the interest rate expressed as an annual percentage along with the amounts borrowed and repaid during the first three months of Year 2. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. Annual Interest Rate Month Amount Borrowed/ (Repaid) $25,000 (5,000) 20,000 January February March 6% 9% 9% Based on this information, the amount of interest expense Barton would recognize in February is Multiple Choice $1,500. $1,800. $150. $125
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