Multiple Select Question

Select all that apply

Houghton Corp. leased equipment to Baraga Company on a dealer$-$type lease. The lease agreement specifies lease payments of $$20,000$ each year for $10$ years. The present value of the leased equipment is $$122,891,$ and the interest rate on the lease is $10\%.$ The cost of the equipment was $$100,000.$ The first lease payment is due at the end of year $1.$ Houghton uses the net method for recording its sales$-$type leases. Which of the following entries is required for Houghton when the first lease payment is made?

Multiple select question.

Credit interest income $$12,289.$

Debit cash $$20,000.$

Credit interest income $$20,000.$

Debit lease receivable $$100,000.$

Credit lease receivable $$7,711.$