On January 1,2011, National Insulation Corporation (NIC) leased office space under a capital lease. Lease payments are made annually. Title does not transfer to the lessee and there is no bargain purchase option. Portions of the lessee's lease amortization schedule appear below Effective Interest Decrease in Balance Outstanding Balance 2011 2011 20,000 2012 2013 20,000 2014 2015 20,000 2016 20,000 17.250 16,975 16,673 16,340 15,974 20,000 2,750 3,025 3,327 3,660 4,026 192,501 172,501 169,751 166,726 163,399 159,739 155,713 20,000 20,000 2028 20,000 2029 20,000 2030 20,000 2031 35,000 7.364 6.101 4,711 3.182 12,636 13,899 15.289 31,818 61,006 47.107 31,818 0 Required (1) What is NIC's lease liability at the inception of the lease (after the first payment)? (Omit the "$" sign in your response.) Lease liability s172501 (2) What amount would NIC record as a leased asset? (Omit the "s" sign in your response.) asset ll$192501 (3) What is the lease term in years? Lease term 20 years MAff 7- (4) What is the asset's residual value expected at the end of the lease term? (Omit the "$" sign in your response.) Asset's residual value STI (5) How much of the residual value is guaranteed by the lessee? (Omit the "$" sign in your response.) Res idual value $ 350001 (6) What is the effective annual interest rate? (Round your answer to the nearest whole percent. Omit the "%"sign in your response.) Effective annual interest rate 10 % (7) What is the total amount of minimum lease pments? (Omit the "$" sign in your response.) Total amount of minimum lease payments $ (8) What is the total effective interest expense recorded over the term of the lease? (Omit the "$ signi your response.) Total effective interest expense $ 242499 References Learning Objective: 15-05 Describe and demonstrate how both the lessee and lessor account for a capital lease. Learning Objective: 15-08 Expla affected by the residual value of Worksheet