On September 1, 2006, Lowe Co issued a note payable to National Bank in the amount of $600,000, bearing interest at 12%, and payable in three equal annual principal payments of $200,000. On this date, the bank's prime rate was 11%. The first payment for interest and principal was made on September 1, 2007. At December 31, 2007, Lowe should record accrued interest payable of

a. $24,000
b. $22,000
c. $16,000
d. $14,667

I said it would be $22,000. I am not sure if I calculated this correctly:confused:

Interst payable= $400,000 *12% * 4/12.

The reamining principle * your Interest rate * months used/12 months.