Yes, enter the interest for the rental property as an expense against rental income (in the rental section).
A note on your state returns. Indiana and Arizona have a hybrid reciprocal agreement called a reverse credit agreement. Your rental income is taxed in both states, and you must file a return in each state, but Arizona will give you a credit for any tax you pay to your home state of Indiana on the income. When you prepare your state returns, prepare the Indiana return first so that the credit can transfer to the Arizona return. (Credit for taxes paid to another state).
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