On September 1, Year 1, Able Company purchased a building from Regal Corporation by paying $340,000 cash and issuing a one-year note payable for the balance of the purchase price. Interest on the note is stated at an annual rate of 12% and is paid at maturity. In its December 31, Year 1, balance sheet, Able correctly presented the note and interest payable as follows:

Interest payable	$13,200
Notes payable, 12%, due September 1, Year 2	$330,000

What is the amount of the interest expense Able will recognize on this note in Year 2?

Multiple Choice

• $26,400

• $13,200

• $39,600

• $23,100