On July $01,2010,$ Lolo Inc signs a note with the bank to borrow $$100,000$ that will be repaid in full July

$01,2012.$ The note bears $5\%$ interest and interest payments are due each July $01$ over the life of the

note. How much interest expense will Lolo Inc recognize in $2011?$

$$5000$

$$7500$

$$10000$

$$2500$