On January 1, 2018, Majestic Mantles leased a lathe from Equipment 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 Majestic. Portions of the Equipment Leasing's lease amortization schedule appear below: Jan. 1 Payments 2018 2018 2019 23,500 Effective Decrease in Outstanding Interest Balance Balance 220,076 196,576 19,658 3,842 192,734 19, 273 4,227 188,507 18,851 4,649 183, 858 18,386 5, 114 178,743 17,874 5, 626 173, 118 17,312 6,188 166,930 2020 23,500 23,500 23,500 23,500 23,500 23,500 23,500 2021 2022 2023 2024 2035 2036 2037 23,500 23,500 23,500 5,844 4,079 2,137 17,656 19,421 21,366 40,787 21,366 0 Required: 1. What is Majestic's lease liability at the beginning of the lease (after the first payment)? 2. What amount would Majestic record as a right-of-use asset? 3. What is the lease term in years? 4. What is the effective annual interest rate? (Round your percentage answers to 1 decimal place.) 5. What is the total amount of lease payments? 6. What is the total effective interest expense recorded over the term of the lease