On January 1, 2018, Calloway Company leased a machine to Zone Corporation. The lease qualifies as a sales-type lease. Calloway paid $340,000 for the machine and is leasing it to Zone for $33,000 per year, an amount that will return 9% to Calloway. The present value of the lease payments is $340,000. The lease payments are due each January 1, beginning in 2018. What is the appropriate interest entry on December 31, 2018?

Multiple Choice

Cash	27,630
Interest receivable		27,630

Cash	30,600
Interest revenue		30,600

Interest receivable	27,630
Interest revenue		27,630

Interest receivable	30,600
Interest revenue		30,600