On September 1, 2006, Lowe Co

Multiple Choice

On September 1, 2006, Lowe Co.issued a note payable to National Bank in the amount of $600,000, bearing interest at 12%, and payable in three equal annual principal payments of $200,000.On this date, the bank's prime rate was 11%.The first payment for interest and principal was made on September 1, 2007.At December 31, 2007, Lowe should record accrued interest payable of

A) $24,000.
B) $22,000.
C) $16,000.
D) $14,667.