Light shows a northern bird by lake (7)
I believe the answer is:
lantern
'light' is the definition.
(lantern is a type of light)
'a northern bird by lake' is the wordplay.
'northern' becomes 'n' (abbreviation e.g. N. Ireland).
'bird' becomes 'tern' (tern is a kind of bird).
'by' is a charade indicator (letters next to each other).
'lake' becomes 'L' (geographical abbreviation).
'a'+'n'+'tern'='antern'
'antern' put after 'l' is 'LANTERN'.
'shows' is the link.
(Other definitions for lantern that I've seen before include "Enclosed lamp" , "Light in a transparent protective case" , "outside D [DECORATION]" , "Transparent case for holding a light" , "Transparent case for candle" .)