On January 1, 2018, Calloway Company leased a machine to Zone Corporation. The lease qualifies as a sales-type lease. Calloway paid $240,000 for the machine and is leasing it to Zone for $31,000 per year, an amount that will return 8% to Calloway. The present value of the lease payments is $240,000. The lease payments are due each January 1, beginning in 2018. What is the appropriate interest entry on December 31, 2018? Multiple Choice

A. Interest receivable 19,200

Interest revenue 19,200

B. Interest receivable 16,720

Interest revenue 16,720

C. Cash 16,720

Interest receivable 16,720

D. Cash 19,200

Interest revenue 19,200