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 188,000 2021 16,000 16,000 172,000 2022 16,000 12,040 3,960 168,040 2023 16,000 11,763 4,237 163,803 2024 16,000 11,466 4,534 159,269 2025 16,000 11,149 4,851 154,418 2026 16,000 10,809 5,191 149,227 2038 16,000 4,309 11,691 49,872 2039 16,000 3,491 12,509 37,363 2040 16,000 2,615 13,385 23,978 2041 25,656 1,678 23,978 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.)

years % 1. Lease term 2. Asset's residual value 3. Effective annual interest rate 4. Lease payments for United . Lease payments for NIC 6. Net investment 7. Total effective interest revenue 8. Right-of-use asset 5. 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 Leasing's 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 2021 2021 2022 2023 2024 2025 2026 Effective Decrease in Outstanding Payments Interest Balance Balance 188,000 16,000 16,000 172,000 16,000 12,040 3,960 168,040 16,000 11,763 4,237 163,803 16,000 11,466 4,534 159,269 16,000 11,149 4,851 154,418 16,000 10,809 5, 191 149,227 | 2038 2039 2040 2041 16,000 16,000 16,000 25,656 4,309 3,491 2,615 1,678 11,691 12,509 13,385 23,978 49,872 37,363 23,978 0 Required: 1. What is the lease term in years? 2. What is the asset's 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 United's net investment at the beginning of the lease (after the first payment)? (Round your answers to nearest whole dollar.) 7. What is United's 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.)