Mary Smith is seeking financing for her new business venture, the development of a local ski hill. She has found two possible sources of

financing: $(1)$ a mortgage payable and $(2)$ a note payable. She can borrow $$110,000$ on January $1,2027,$ from either, but the repayment

terms differ.

Mortgage payable details: $,$$$110,000$ mortgage with an annual interest rate of $8\%.$ The loan is repayable over $5$ years in annual

installments of $$27,550,$ principal and interest, due each December $31.$ The first payment is due December $31,2027,$ and the last on December $31,2031.$

Long$-$term note details: $,$$$110,000,5-$year note with an annual interest rate of $5\%.$ Annual interest is due each December $31.$

The principal is due January $1,2032$

Show the balance sheet presentation for each option assumed in part $($a$)$ at December $31,2027.$

Part a answer:

Interest Expense for the year ending Dec. $31,2027$:

Mortgage Payable: $$8800$

Long Term Note Payable: $$5500$