On September 1, 2020, a company borrowed on a P5,400,000 note payable from a bank. The note bears interest at 12% and is payable in 3 equal annual principal payments of P1,800,000. On this date, the bank's prime rate was 11%. The first annual payment for interest and principal was made on September 1, 2021. On December 31, 2021, what amount should be reported as accrued interest payable?
On September 1, 2020, a company borrowed on a P5,400,000 note payable from a bank. The note bears interest at 12% and is payable in 3 equal annual principal payments of P1,800,000. On this date, the bank's prime rate was 11%. The first annual payment for interest and principal was made on September 1, 2021. On December 31, 2021, what amount should be reported as accrued interest payable?
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 11E
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On September 1, 2020, a company borrowed on a P5,400,000 note payable from a bank. The note bears interest at 12% and is payable in 3 equal annual principal payments of P1,800,000. On this date, the bank's prime rate was 11%. The first annual payment for interest and principal was made on September 1, 2021. On December 31, 2021, what amount should be reported as accrued interest payable?
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