On September 1, 2017 Culver Corp. issued a 9% note payable to National Bank for $750,000, payable in three equal annual principal payments of $250,000, plus interest. On this date, the bank’s prime rate was 8%. The first payment for interest and principal was made on September 1, 2018. At December 31, 2018, Culver should record accrued interest payable of
A. $13,333.
B. $22,500.
C. $15,000.
D. $10,000.
Answer:C
On September 1, 2017 Culver Corp. issued a 9% note payable to National Bank for $750,000, payable in three equal annual principal payments of $250,000, plus interest. On this date, the bank’s prime rate was 8%. The first payment for interest and principal was made on September 1, 2018. At December 31, 2018, Culver should record accrued interest payable of
A. $13,333. B. $22,500. C. $15,000. D. $10,000.