S9-12. (Learning Objective 3: Recording operating and capital lease) Lily Pan Enterprises entered into two lease agreements for 5 years on January 1, 20X0. Both leases require a payment of $15,000 per year at the end of each year. Lease 1 is structured as an operating lease while Lease 2 is structured as a capital lease with an implicit interest rate of 5%. Prepare all relevant journal entries for both leases on:

a. The day of signing the lease contract

b. The day of the first lease payment