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On March 1, 2015, Fine Co. borrowed $10,000 and signed a two-year note bearing interest at 12% per annum compounded annually. Interest is payable in

On March 1, 2015, Fine Co. borrowed $10,000 and signed a two-year note bearing interest at 12% per annum compounded annually. Interest is payable in full at maturity on February 28, 2017. What amount should Fine report as a liability for accrued interest at December 31, 2016?

a. $       0

b. $1,000

c. $1,200

d. $2,320

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