(A) Modern Ltd has decided to lease a plant from a supplier and has agreed the following terms with the supplier: Date of inception of lease: 1 July 2019 Duration of lease: 10 years Life of leased asset: 10 years Unguaranteed residual value: $15,000 Lease payments: 10,000 at lease inception and $12,000 on 30 June each year for the next 10 years. Fair value of leased plant at date of lease inception: $97,469 i. Determine the interest rate implicit in the lease (show detailed workings). (5 Marks)

ii. Provide a journal to recognise the lease liability at inception of the lease. (2 Marks)