Mech Beach Ltd enters into a seven-years lease of a machine on 01 July 2020. Mech Beach Ltd will pay fixed annual payments of $50 000 for seven years with the first payment on 30 June 2021. Mech Beach Ltd is willing to exercise bargain purchase price option for $40 000 at the end of the lease term. The machine is expected to have a useful life of 10 years and no residual value. Additional information . Lessee's incremental borrowing rate: 10% . 3.1 Present value of an annuity in arrears of $1 for 7 periods at 10%-4.8684 Present value of $1 in periods at 10% -0.5132 Prepare the journal entries for the years ending 30 June 2021 and 30 June 2022. [15 marks]