Yes. But then you enter the mortgage interest as an expense and you have to depreciate the cost over time.
You enter the total rent you received for the year. Then you enter your expenses like Mortgage Interest, Property Tax, Insurance, Repairs, etc. You can only deduct mortgage interest not the principal part of the mortgage. You should be depreciating the cost of the rental over 27.5 years, that will take care of the principal part of the mortgage.
Yes, you must count all income from the renter as rental income. You'll deal with the mortgage stuff later in the rental expenses section. The principle part of your mortgage payment is not deductible. Only the interest. The program will walk you through all of this, if you let it.