Illini leases equipment to Cardinal Corporation under a four-year lease agreement on 1/1/20x1. The equipment has a net carrying value of $90,000 on Illinis book on 1/1/20x1. The fair value of the equipment is $132,357. Illinis initial costs incurred for the lease arrangement is $10,000. The lease specifies annual payments of $36,000 on each 1/1 and beginning 1/1/20x1. The expected useful life of the equipment is five years. The expected residual value of the equipment is $10,000, which is guaranteed by Cardinal. The implicit rate is 10%.

Project 2.2 Part 3 Journal Entries

Date	Account Name (Debit)	Account Name (Credit)	Debit	Credit
1/1/20X1	Investment in lease		132357
	COGS		90000
	Selling expense-Initial issuance cost		10000
		Equipment		90000
		Cash		10000
		Sales revenue		132357
1/1/20X1	Cash		36000
		Investment in lease		36000
12/31/20X1	Interest receivable		[ I ]
		Interest revenue		[J]
1/1/20X2	Cash		36000
		Interest receivable		[L]
		Investment in lease		[M]
12/31/20X2	Interest receivable		[N]
		Interest revenue		[O]

Enter the correct journal entry for part [ I ] [J] [K] [L] [M] [N] [O]