On January 1, 2021, 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 Interest Decrease in Balance Jan. 1 Payments 2021 2022 2023 2024 2025 2026 2027 21,500 21,500 21,500 21,500 21,500 21,500 21,500 17,985 17,633 17,246 16,821 16,353 15,838 21,500 3,515 3,867 4,254 4,679 5, 147 5,662 Outstanding Balance 201,346 179,846 176,331 172,464 168,210 163,531 158,384 152,723 2038 2039 2040 21,500 21,500 21,500 5,347 3,731 1,955 16,153 17,769 19,545 37,315 19,547 0 Required: 1. What is Majestic's lease liability after the first lease 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 Right-of-use asset 2. 3. Lease term years 4. Effective annual interest rate % 5. Total of lease payments Total effective interest expense 6