On January 1, 2024, 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: January 1 Payments Effective Interest Decrease in Balance Outstanding Balance $187,298 2024 $ 20,000 $ 20,000 2025 $ 20,000 $ 16,730 $ 3,270 $167,298 $ 164,028 2026 $ 20,000 $ 16,403 $ 3,597 $ 160,431 2027 $ 20,000 $ 16,043 $ 3,957 $ 156,474 2028 $ 20,000 $ 15,647 $ 4,353 $ 152,121 2029 $ 20,000 2030 $ 20,000 $ 15,212 $14,733 $ 4,788 $ 5,267 $ 147,333 $ 142,066 2041 2042 2043 $ 20,000 $ 4,974 $ 15,026 $ 20,000 $3,471 $ 20,000 $ 1,818 $ 16,529 $18,182 $34,711 $ 18,182 $0 Required: 1. What is Majestic's lease liability at the beginning of the lease (after the first 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? 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. Lease liability 2 Right-of-use asset 3 Lease term 4. Effective annual interest rate i 5. Total of lease payments 6. Total effective interest expense years %