Franklin Company obtained an $ 85,000 line of credit from the State Bank on January 1 , 2016 . The company agreed to acce interest rate that was set at 1 % above the bank 's prime lending rate . The bank 's prime rate of interest and the amounts bor during the first three months of 2016 are shown in the following table . Assume that Franklin borrows or repays on the first d month . Borrowing is shown as a positive amount and repayments are shown as negative amounts indicated by parenthese Amount Borrowed or ( Repaid ) Prime Rate for the Month 1 - Jan $ 22,000 4.0 % 1 - Feb ( $ 6,000 ) 4.5 %