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: Jan. 1 Payments 2021 2022 2023 2024 2025 2026 2027 21,000 21,000 21,000 21,000 21,000 21,000 21,000 Effective Decrease in Outstanding Interest Balance Balance 208,952 21,000 187,952 16,916 4,084 183,868 16,548 4,452 179,416 16, 147 4,853 174,563 15,711 5, 289 169, 274 15, 235 5,765 163,509 14,716 6,284 157, 224 2038 2039 2040 21,000 21,000 21,000 4,784 3,325 1,734 16,216 17,675 19,266 36,940 19, 264 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. 2. Lease liability Right-of-use asset Lease term 3. years % 4. Effective annual interest rate 5. Total of lease payments Total effective interest expense 6