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: 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? \begin{tabular}{|l|l|l|l|} \hline & & & \\ \hline 1. & Lease liability & & \\ \hline 2. & Right-of-use asset & & \\ \hline 3. & Lease term & & years \\ \hline 4. & Effective annual interest rate & & % \\ \hline 5. & Total of lease payments & & \\ \hline 6. & Total effective interest expense & & \\ \hline \end{tabular}