On January 1, 2021, National Insulation Corporation (NIC) leased equipment from United 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 NIC. Portions of the United Leasings lease amortization schedule appear below: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Jan. 1	Payments		Effective Interest		Decrease in Balance		Outstanding Balance
2021							225,001
2021	26,000				26,000		199,001
2022	26,000		23,880		2,120		196,881
2023	26,000		23,626		2,374		194,507
2024	26,000		23,341		2,659		191,848
2025	26,000		23,022		2,978		188,870
2026	26,000		22,664		3,336		185,534
2038	26,000		13,004		12,996		95,374
2039	26,000		11,445		14,555		80,819
2040	26,000		9,698		16,302		64,517
2041	72,259		7,742		64,517		0

Required: 1. What is the lease term in years? 2. What is the assets residual value expected at the end of the lease term? (Round your answers to nearest whole dollar.) 3. What is the effective annual interest rate? (Round your percentage answer to 1 decimal place.) 4. What is the total amount of lease payments for United? (Round your answers to nearest whole dollar.) 5. What is the total amount of lease payments for NIC? (Round your answers to nearest whole dollar.) 6. What is Uniteds net investment at the beginning of the lease (after the first payment)? (Round your answers to nearest whole dollar.) 7. What is Uniteds total effective interest revenue recorded over the term of the lease? (Round your answers to nearest whole dollar.) 8. What amount would NIC record as a right-of-use asset at the beginning of the lease? (Round your answers to nearest whole dollar.)

1. years 2. 3. % 4. Lease term Asset's residual value Effective annual interest rate Lease payments for United Lease payments for NIC Net investment Total effective interest revenue Right-of-use asset 5. 6. 7. 8