On September 1, 2019, a company borrowed on a P5,400,000 note payable from a bank. The note bears interest at 12% and is payable in three equal annual principal payments of P1,800,000. On this date, the bank’s prime rate was 11%. The first annual payment for interest and principal was made on September 1, 2020. On December 31, 2020, what amount should be reported as accrued interest payable?
On September 1, 2019, a company borrowed on a P5,400,000 note payable from a bank. The note bears interest at 12% and is payable in three equal annual principal payments of P1,800,000. On this date, the bank’s prime rate was 11%. The first annual payment for interest and principal was made on September 1, 2020. On December 31, 2020, what amount should be reported as accrued interest payable?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On September 1, 2019, a company borrowed on a P5,400,000 note payable from a bank. The note bears interest at 12% and is payable in three equal annual principal payments of P1,800,000. On this date, the bank’s prime rate was 11%. The first annual payment for interest and principal was made on September 1, 2020. On December 31, 2020, what amount should be reported as accrued interest payable?
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