Accounting for Leases On January 3, 2020, Hanna Corporation signed a lease on a machine for its manufacturing operation and the lease commences on the same date. The lease requires Hanna to make six annual lease payments of $12,000 with the first payment due December 31,2020. 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, 2020, to record this lease assuming. i. the lease is reported as an operating lease. ii. the lease is reported as a finance lease. b. Post the journal entries of part a to the appropriate T-accounts. C. Show how the entries posted in part b would affect the financial statements using the financial statement effects template. Note: Round answers to the nearest dollar. Use rounded answers for subsequent computations. Journal entries T-accounts Financial statement effects template Note: Use negative signs with your answers, when appropriate. i. the lease is reported as an operating lease. Balance Sheet Noncash Contra Transactions Cash Asset Assets Assets Operating leasecommences. 0 57,198 0 Lease payment. 0 0 9,533 Record leaseexpense andchanges to assetand liability. (12,000) 0 0 Liabilities 57,198 Contributed Capital 0 Earned Capital 0 Income Statement Net Revenues Expenses Income 0 0 0 0 9,533 (9,533) 0 4,004 (4,004) 0 0 0 (7,996) 0 0 ii. the lease is reported as a finance lease. Balance Sheet Noncash Contra Transactions Cash Asset Assets Assets Finance leasecommences. 0 0 0 Amortization ofleased asset. 0 0 Made annualpayment. 0 0 Liabilities 0 Contributed Capital 0 Earned Capital 0 0 Income Statement Net Revenues Expenses Income 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0