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    patbobogr's Avatar
    patbobogr Posts: 1, Reputation: 1
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    #1

    Nov 18, 2008, 08:42 AM
    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:
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Dec 12, 2008, 07:53 PM

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

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