E7-27A. Larry the Locksmith needed some long-term financing and arranged for a $200,000, 20-year mortgage loan on 12/31/2009.The interest rate is 7% per year, with $20,000 (rounded) payments made at the end of each year, starting 12/31/2010.

What is the amount of interest expense related to this loan for 2010?

What is the amount of liability should appear on the 12/31/2010, balance sheet?

What is the amount of interest expense related to this loan for 2011?

What is the amount of liability should appear on the 12/31/2011, balance sheet?