Accounting for Leases On January 3, 2017, Hanna Corporation signed a lease on a machine for its manufacturing operation. he lease requires Hanna to make six annual lease payments of $18,000 with the first payment due December 31, 2017. Hanna could have financed the machine by borrowing the purchase price at an interest rate of 5%. Prepare the journal entries that Hanna Corporation would make on January 3 and December 31, 2017, to record this lease assuming its i an operating lease and i. a capital lease. Round answers to the nearest whole number. If no entry is required, select "No entry" from the drop- down answer options for the debit and credit entries i. 16 Finish Time the lease is reported as an operating lease General Journal Credit Debit Date Description Jan. 3 To record inception of lease Dec. 31 To record depreciation expense 31 b, Assuming that the lease is treated as a capital lease, post the journal entries or part a to c appropriate T-accounts. Cash Leased Asset Lease Liability Accumulated Depreciation Interest Expense Depreciation Expense ted in part b would affect the financial statements using the financial Use negative signs with answers, when appropriate c. Show how the entries pos statement effects template. 13 Dec. 31 o record depreciation expense reported as.a capitaldease. General Journal Credit Debit Date Description To record inception of lease To record depreciation expense