Question: On September 1, 2014, Lowe Co. issued a note payable to National Bank in the amount of $900,000, bearing interest at 9%, and payable in

On September 1, 2014, Lowe Co. issued a note payable to National Bank in the amount of $900,000, bearing interest at 9%, and payable in three equal annual principal payments of $300,000. On this date, the bank's prime rate was 8%. The first payment for interest and principal was made on September 1, 2015. At December 31, 2015, Lowe should record accrued interest payable of

a. $27,000.

b. $24,000.

c. $18,000.

d. $16,000.

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