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 $191,981 $171,481 January 1 Payments Effective Interest Decrease in Balance 2024 $ 20,500 $ 20,500 2025 $ 20,500 $ 17,148 $ 3,352 $ 168,129 2026 $ 20,500 $ 16,813 $ 3,687 5 164,442 2027 $ 20,500 $ 16,444 $ 4,956 $ 160,386 2028 $ 20,500 $ 16,039 $ 4,461 $ 2029 $ 20,500 $ 15,592 $ 4,988 155,925 $151,017 2030 $ 20,500 $ 15,102 $ 5,398 $ 145,619 2041 $ 20,500 $ 5,098 $ 15,402 2042 $ 20,500 $ 3,558 $ 16,942 $ 35,579 $ 18,637 2043 $ 20,500 $ 1,864 $ 18,636 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? 1. Lease liability 2. Right-of-use asset 3. Lease term 4. Effective annual interest rate 5. Total of lease payments 6. Total effective interest expense years %