## Working

\[
\text{Initial lease liability}
= \sum_{t=1}^{5}\frac{25{,}000}{(1.07)^t}
= 25{,}000 \times \frac{1-(1.07)^{-5}}{0.07}
= 25{,}000 \times 4.1001974357
= \$102{,}504.94
\]

(a) Initial lease liability: **$102,504.94**

(b) Initial right-of-use asset: **$102,504.94**

Governing accounting standard: **AASB 16 Leases**.