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 Jan. 1 Payments 2021 2022 2023 2024 2025 2026 2027 28,000 28,000 28,000 28,000 28,000 28,000 28,000 22,554 22,064 21,530 20,948 20,313 19,621 Decrease in Outstanding Balance Balance 278,603 28,000 250, 603 5,446 245, 157 5,936 239, 221 6,47 232, 751 7,052 225,699 7,687 218, 012 8,379 209,633 2038 2039 2040 28,eee 28,000 28,000 6,379 4,433 2,312 21,621 23,567 25,688 49,254 25,687 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. 2. 3. Lease liability Right-of-use asset Lease term Effective annual interest rate Total of lease payments Total effective interest expense years % 4. 5. 6