On September 1 2010 Herman Co. issued a note payable to National Bank in the amount of 1,200,000 bearing interst at 12% and payable in three equal annual principal payments of $400,000. On this date the banks prime rate was 11%. The first payment for interst and principla was made on September 1 2011. At december 31 2001, Herman should record accured insterst payable.