On 1 July 2020, Lessor Limited signed a non-cancellable lease with Lessee Limited to lease a land and buildings package. The agreement comprises seven annual lease payments of $75,000 with payments made in arrears (for example, the first payment is made on 30 June 2021). The payment includes $5,000 reimbursement payment to Lessor Limited incurred on repairs and maintenance of the property where such activities are undertaken by Lessor Limited. The buildings are expected to have a remaining useful life of 9 years with no residual value. Additional information is as follows. Fair value on 1 July 2020 Unguaranteed value at end of the lease term Land $125,000 $40,000 Building $257,788 $100,000 Total $382,788 $140,000 Required: a) Prove that the rate of interest implicit in the lease is 12 per cent showing that the fair value of the land and building package on 1 July 2020 equates to the present value of periodic lease payments and unguaranteed residual value 6 Marks b) Calculate and show the amount of lease payment allocated in the land and building package 2 Marks i. Land ii. Building c) Calculate and show the present value of lease payments of the building