Question

On September 1, 2021, Coronado Industries issued a note payable to National Bank in the amount of $1420000, bearing interest at 9%, and payable in three equal annual principal payments of $590000. On this date, the bank's prime rate was 8%. The first payment for interest and principal was made on September 1, 2021. At December 31, 2021, Coronado should record accrued interest payable of

Answer 1

$24,900

Step-by-step explanation:

Calculation for what Coronado should record the accrued interest payable

First step is to calculate the Balance principal payable on Dec 31,2021

Balance principal payable= 1,420,000 - 590,000

Balance principal payable= 830,000

Now let calculate the Accrued interest payable

Accrued interest payable = (830,000*9%) * 4 months/12 months

Accrued interest payable =74,700* 4 months/12 months

(Sep to Dec)

Accrued interest payable =$24,900

Therefore Coronado should record accrued interest payable of $24,900