P 15-3 Lease amortization schedule .LO15-2 On January 1, 2021, 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 Majestie. Portions of the Equipment Leasing's lease amortization schedule appear below: Decrease In Balance Jan. 1 Payments Effective Interest 2021 2022 2023 20,000 20,000 20.000 20,000 20.000 20.000 20,000 2024 2025 2026 Outstanding Balance 187.298 167 298 164.028 160.431 156.474 152,122 147,334 142,067 16,730 16.403 16.043 15.647 15.212 14.733 20.000 3,270 3.597 3.957 4,353 4.788 5.267 2027 20,000 20,000 20,000 2039 2040 15.026 16,529 18,182 34.711 18,182 1.818 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? page 895