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 Decrease in Outstanding Jan. 1 Paynents Interest Balance Balance 268,653 2021 27,000 27,000 241,653 2022 27,000 21,749 5,251 236,402 2023 27,000 21,276 5,724 230,678 2024 27,000 20,761 6,239 224,439 2025 27,000 20,230 6,800 217,639 2026 27,000 19,587 7,413 210, 226 2027 27,000 18,920 8,080 202, 146 2038 2039 2040 27,000 27,000 27,000 6,151 4,275 2,229 20,849 22,725 24,771 47,496 24,770 Required: 1. What is Majestic's lease liability after the firsttease 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 4 years % 5 6