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

**Accounting standard:** AASB 16  

**Working**  
The lease liability is the present value of the five $25,000 payments discounted at 7 %:  

\[
PV = 25{,}000 \times \frac{1-(1.07)^{-5}}{0.07}
\]

\[
(1.07)^5 = 1.4025517307 \implies (1.07)^{-5} \approx 0.712986179
\]

\[
1-0.712986179=0.287013821
\]

\[
\frac{0.287013821}{0.07}=4.100197443
\]

\[
25{,}000\times 4.100197443=102{,}504.936 \quad \text{(rounds to } \$102{,}504.94\text{)}
\]

(Verification by individual terms yields the identical total of $102,504.94.)  

Because there are no initial direct costs, lease incentives, prepaid rent or restoration costs, the initial right-of-use asset equals the initial lease liability under AASB 16.