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On January 1 , 2 0 2 4 , National Insulation Corporation ( NIC ) leased equipment from United Leasing under a finance lease. Lease

On January 1,2024, National Insulation Corporation (NIC) leased equipment from United Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by NIC. Portions of the United Leasings lease amortization schedule appear below:
January 1 Payments Effective Interest Decrease in Balance Outstanding Balance
2024 $ 175,000
2024 $ 12,000 $ 12,000 $ 163,000
2025 $ 12,000 $ 7,335 $ 4,665 $ 158,335
2026 $ 12,000 $ 7,125 $ 4,875 $ 153,460
2027 $ 12,000 $ 6,906 $ 5,094 $ 148,366
2028 $ 12,000 $ 6,676 $ 5,324 $ 143,042
2029 $ 12,000 $ 6,437 $ 5,563 $ 137,479
2041 $ 12,000 $ 2,566 $ 9,434 $ 47,581
2042 $ 12,000 $ 2,141 $ 9,859 $ 37,722
2043 $ 12,000 $ 1,697 $ 10,303 $ 27,419
2044 $ 28,653 $ 1,234 $ 27,419 $ 0
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
What is the lease term in years?
What is the assets residual value expected at the end of the lease term?
What is the effective annual interest rate?
Note: Enter your answer as a percent rounded to 1 decimal place.
What is the total amount of lease payments for United?
What is the total amount of lease payments for NIC?
What is Uniteds net investment at the beginning of the lease (after the first payment)?
What is Uniteds total effective interest revenue recorded over the term of the lease?
What amount would NIC record as a right-of-use asset at the beginning of the lease?
Note: Round your answers to nearest whole dollar.

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