Whats the answer to i. and b?

Here the correct journal entry.

whats the answer to b?

Question 1 Partially correct Mark 105.00 out of 116.00 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 Income Statement 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. 57,198 0 Lease payment. (4,004) X Record leaseexpense andchanges to assetand liability. (12,000) X 0X Contributed Capital 0 Earned Capital 0 Expenses Revenues 0 Net Income 0 Liabilities 57,198 0X (7,996) * 12,000 X 4,004 x (12,000) X (4,004) * 07 Income Statement ii. the lease is reported as a finance lease. Balance Sheet Noncash Contra Transactions Cash Asset Assets Assets Finance leasecommences, 0 57,198 0 Amortization ofleased asset. 9,533 Made annualpayment. (12,000) Contributed Capital Earned Capital Revenues Expenses Liabilities 57,198 0 0 Net Income 0 ( (9,533) (4,004) 0 (9,533) (4,004) 9,533 4,004 (7,996) ) 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 Debit 57,198 Credit 0 57,198 0 i. The lease is reported as an operating lease. Date Description 1/3/19 Right-of-use asset-operating lease Operating lease liability 12/31/19 Operating lease liability Cash 12/31/19 Operating lease expense Right-of-use asset-operating lease Operating lease liability 12,000 0 12,000 12,000 0 7.996 4,004 0 Debit Credit ii. The lease is reported as a finance lease. Date Description 1/3/19 Right-of-use lease asset - finance lease Finance lease liability 12/31/19 Amortization expense - finance lease Accumulated amortization - finance lease 12/31/19 Interest expense Finance lease liability Cash 57,198 0 9,533 57,198 0 0 9.533 0 4,004 7,996 0 12,000 On January 1, 2020, Weber, Inc., entered into two lease contracts. The first lease contract was a six-year lease for computer equipment with $15,000 annual lease payments due at the end of each year. Weber took possession of the equipment on January 1, 2020. The second lease contract was a six-month lease, beginning January 1, 2020 for warehouse storage space with $1,000 monthly lease payments due the first of each month. Weber made the first month's payment on January 1, 2020. The present value of the lease payments under the first contract is $74,520. The present value of the lease payments under the second contract is $5,853. a. Assume that the first lease contract is a finance lease. Prepare the appropriate journal entry for this lease on January 1, 2020. Debit Credit Date Description 1/1/20 Right-of-use lease asset - finance lease Finance lease liability 74,520 0 0 74,520 b. Assume the second lease contract is an operating lease. Prepare the proper journal entry for this lease on January 1, 2020. Date Description Debit Credit 1/1/20 Right-of-use asset - operating lease 74,520 x 0 Operating lease liability O 74,520 x To record inception of lease 1/1/20 Operating lease liability 1,000 Cash 1,000 To record lease payment. 0 O