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: Effective Decrease in Outstanding Interest Jan. 1 Payments Balance Balance 2018 2018 2019 2020 2021 2022 2023 28,000 28,000 28,000 28,000 28,000 28,000 28,000 23,422 22,964 22,460 21,906 21,297 20,627 28,000 4,578 5,036 5,540 6,094 6,703 7,373 262,217 234,217 229,639 224,603 219,063 212,969 206,266 198,893 2035 2036 2037 28,000 28,000 28,000 6,963 4,859 2,545 21,037 23,141 25,450 48,591 25,450 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? 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? 1. Lease liability 2. Right-of-use asset 3. Lease termm 4. Effective annual interest rate 5. Total of lease payments 6. Total effective interest expense years