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-   -   Accrued interest payable (https://www.askmehelpdesk.com/showthread.php?t=282328)

  • Nov 18, 2008, 08:42 AM
    patbobogr
    Accrued interest payable
    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:
  • Dec 12, 2008, 07:53 PM
    pready

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

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

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