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What amount should brak report as accrued interest payable

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Reference no: EM131105263

On September 1, year 1, Brak Co. borrowed on a $1,350,000 note payable from Federal Bank. The note bears interest at 12% and is payable in three equal annual principal payments of $450,000.

On this date, the bank's prime rate was 11%. The first annual payment for interest and principal was made on September 1, year 2. At December 31, year 2, what amount should Brak report as accrued interest payable?

Reference no: EM131105263

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