On September 1, 2010, Herman 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, 2011.At December 31, 2011, Herman should record accrued interest payable of

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The Answer of On September 1, 2010, Herman 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, 2011.At December 31, 2011, Herman should record accrued interest payable of