Colson Company has a line of credit with Federal Bank. Colson can borrow up to $800,000 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of the year. Colson agreed to pay interest at an annual rate equal to 2 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of the month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6 percent (4 percent + 2 percent) annual interest on $80,000 for the month of January.

Month Amount Borrowed or Repaid Prime Rate for the Month

January $80,000 4.0%
February 50,000 4.25%
March (30,000) 4.5%
April 20,000 4.25%

Construct a chart calculating the loan balance at the end of each month and the interest expense for each month. Using the chart then construct journal entries pertaining to Colson's line of credit for the first four months of the year.