This is an accounting question from the book for an MBA level. It is complete question since it is directly from the book.

M10-13.Stat eBook 3 Print Question 1 Not complete Marked out of 116,00 P Flag question 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 i. The lease is reported as an operating lease. Date Description 1/3/19 Debit Credit 12/31/19 12/31/19 Operating lease liability ii. The lease is reported as a finance lease. Date Description 1/3/19 Debit Credit C 12/31/19 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 i. The lease is reported as an operating lease, Date Description 1/3/19 Debit Credit 12/31/19 12/31/19 Operating lease liability ii. The lease is reported as a finance lease. Date Description 1/3/19 Debit Credit 12/31/19 12/31/19 Interest expense 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 i. the lease is reported as an operating lease. Operating Lease Liability Cash Right-of-use Asset-Operating Lease Lease Expense ii. the lease is reported as a finance lease. Cash Finance Lease Liability Accumulated Amortization Right-of-use Asset-Finance Lease Interest Expense Amortization Expense Cboel M10-13.Stat eBook 3 Print Question 1 Not complete Marked out of 116,00 P Flag question 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 i. The lease is reported as an operating lease. Date Description 1/3/19 Debit Credit 12/31/19 12/31/19 Operating lease liability ii. The lease is reported as a finance lease. Date Description 1/3/19 Debit Credit C 12/31/19 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 i. The lease is reported as an operating lease, Date Description 1/3/19 Debit Credit 12/31/19 12/31/19 Operating lease liability ii. The lease is reported as a finance lease. Date Description 1/3/19 Debit Credit 12/31/19 12/31/19 Interest expense 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 i. the lease is reported as an operating lease. Operating Lease Liability Cash Right-of-use Asset-Operating Lease Lease Expense ii. the lease is reported as a finance lease. Cash Finance Lease Liability Accumulated Amortization Right-of-use Asset-Finance Lease Interest Expense Amortization Expense Cboel