Henry Ltd., a large Australian banking company has recently acquired a floor in a large, newly built shopping mall.

On July 1st 2023, Henry entered into a lease contract with Pixie Ltd. for the use of the entire floor in the new mall. For the next 8 years Pixie will pay Henry a monthly fee of $2,000,000 in arrears. The floor currently has a fair value of $136,520,710.00, and the interest rate implicit in this contract is 12.68% p.a. (or 1% per month). The floor has an expected useful life of 10 years, at which Henry expects it to be worth $5,000,000. At the end of the 8-year contract, Henry expects the floor to be worth $35,000,000. Pixie guarantees Henry will be able to sell the floor in the mall to a third party for at least $25,000,000 at the end of the contract, if the sales price is lower Pixie will make up the difference.

QUESTION: Upon the receipt of Pixies payment on 30/09/2024, Henry will record the following in their journal (values reported in thousands):

a. DR Cash $2,000 CR Leasing Revenue $2,000

b. DR Cash $2,000 CR Interest Revenue $1,270 CR Lease Receivable $730

c. None of the other options

d. DR Cash $2,000 CR Interest Revenue $1,352 CR Lease Receivable $648

e. DR Interest Revenue $1,352 DR Lease Receivable $648 CR Cash $2,000