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: Outstanding Balance Effective Decrease in January 1 Payments Interest Balance $ 234,123 2024 $ 25,000 $ 25,000 $ 209,123 2025 $ 25,000 $ 20,912 $ 4,088 $ 205,035 2026 $ 25,000 $ 20,504 $ 4,496 $ 200,539 2027 $ 25,000 $ 20,054 $ 4,946 $ 195,593 2028 $ 25,000 $ 19,559 $ 5,441 $ 190,152 2029 $ 25,000 $ 19,015 $ 5,985 $ 184,167 118 2030 $ 25,000 $ 18,417 $ 6,583 $ 177,584 2041 $ 25,000 $ 6,217 $ 18,783 $ 43,388 2042 2043 $ 25,000 $ 4,339 $ 20,661 $ 22,727 $ 25,000 $ 2,273 $ 22,727 $ 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? Note: Round your percentage answer 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?