Pie Company issued a $ 240,000, 5%, 20-year note payable on January 1, 2021 with repayment terms of equal monthly instalments plus interest at the beginning of every month with the first payment due on February 1, 2021. What amount would represent the December 31, 2021 year-end accrued interest expense rounded to the nearest dollar?

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The accrued interest expense for December 31, 2021, is calculated based on the remaining principal balance after monthly payments. The interest for one month is calculated as (remaining principal balance) * (5% annual interest rate / 12 months). After 11 months of payments, the remaining principal balance is reduced, and the interest for December is calculated on this reduced balance, resulting in $954.

Pie Company Issued a $ 240,000, 5%, 20-Year Note Payable