On September 1, year 1, Brak Co. borrowed on a $1,350,000 note payable from Federal Bank. The note bears interest at 12% and is payable in three equal annual principal payments of $450,000. On this date, the bank's prime rate was 11%.
The first annual payment for interest and principal was made on September 1, year 2. At December 31, year 2, what amount should Brak report as accrued interest payable?