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 Leasings lease amortization schedule appear below:

Jan. 1	Payments		Effective Interest		Decrease in Balance		Outstanding Balance
							191,981
2018	20,500		0		20,500		171,481
2018	20,500		17,148		3,352		168,129
2019	20,500		16,813		3,687		164,442
2020	20,500		16,444		4,056		160,386
2021	20,500		16,039		4,461		152,122
2022	20,500		15,212		5,288		146,834
2023	20,500		14,683		5,817		141,017
2035	20,500		5,098		15,402		35,578
2036	20,500		3,558		16,942		18,636
2037	20,500		1,864		18,636		0

Required:

1. What is Majestics 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?