Accounting for Leases On January 3, 2017, Hanna Corporation signed a lease on a machine for its manufacturing operation. The lease requires Hanna to make six annual lease payments of $12,000 with the first payment due December 31, 2017. Hanna could have financed the machine by borrowing the purchase price at an interest rate of 7%. a. 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 ii. 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. C. Show how the entries posted in part b would affect the financial statements using the financial statement effects template. Balance Sheet Noncash Assets Transaction Cash Asset Contra Asset Liabil 1. Signed a capital lease. 2. Depreciation on leased asset. 3. Made annual lease payment Income Statement Earned Capital Contrib. Capital Revenue - Expenses = Net Income