Question: On September 1, 2018, Davis Co. issued a note payable to National Bank in the amount of $2,100,000, bearing interest at 10%, and payable in

On September 1, 2018, Davis Co. issued a note payable to National Bank in the amount of $2,100,000, bearing interest at 10%, and payable in three equal annual principal payments of $700,000. On this date, the bank's prime rate was 11%. The first payment for interest and principal is scheduled for September 1, 2019. At December 31, 2018, Davis should record accrued interest payable of

a.$58,000.

b.$54,000.

c.$64,000.

d.$70,000

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