On September 1, 2006, Looper Co

Multiple Choice

On September 1, 2006, Looper Co.issued a note payable to National Bank in the amount of $1,200,000, bearing interest at 12%, and payable in three equal annual principal payments of $400,000.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, Looper should record accrued interest payable of

A) $48,000.
B) $44,000.
C) $32,000.
D) $29,334.