Question: On September 1, 2010, Brak Co. borrowed on a $1,350,000 note payable from Federal Bank. The note bears interest at 12% and is payable in

On September 1, 2010, 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, 2011. At December 31, 2011, what amount should Brak report as accrued interest payable?

a. $54,000

b. $49,500

c. $36,000

d. $33,000

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