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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 $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%. 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. i. the lease is reported as an operating lease. General Journal Date Description Debit Credit Jan. 3 To record inception of lease Dec. 31 To record depreciation expense. Dec. 31 To record payment on lease. ii. the lease is reported as a capital lease. General Journal Date Description Debit Credit Jan. 3 0 To record inception of lease Dec. 31 To record depreciation expense. Dec. 31 Cash 0 To record payment on lease. b. Assuming that the lease is treated as a capital lease, post the journal entries of part a to the appropriate T-accounts. Cash 0 Lease Liability 0 Leased Asset 0 Accumulated Depreciation Interest Expense Depreciation Expense C.Show how the entries posted in part b would affect the financial statements using the financial statement effects template. Use negative signs with answers, when appropriate. Balance Sheet Transaction Cash Asset + - Contra AssetLiabilities Assets 1. Signed a capital lease. 2. Depreciation on leased asset. 3. Made annual lease payment Please answer all parts of the question. 0 0 Income Statement Contrib. + Capital Earned Liabilities+ Capital Revenue- Expenses Net Inco 0 0 0 0 0