The Beloit Bearing Company leased a machine from J. Case Leasing Company. The lease requires 10 annual payments of $10,000 beginning immediately. The lease contract specifies the rate implicit in the lease of 12% and a purchase option of $10,000 at the end of the tenth year. The estimated fair market value of the machine at the end of the lease is $20,000. Beloit Bearing Company is reasonably certain to exercise the purchase option. Beloit Bearings cost of capital (borrowing rate) is also 12%. The present value of an annuity due of 1 at for 10 years is 6.328 The present value of 1 at: for 10 years is .322 A. What amounts should Beloit Bearing record as the lease liability and value of the right of use asset. B. Present the journal entry for this transaction.