On January 1, 2021, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are mad

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On January 1, 2021, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are mad

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On January 1, 2021, Majestic Mantles leased a lathe fromEquipment Leasing under a finance lease. Lease payments are madeannually. Title does not transfer to the lessee and there is nopurchase option or guarantee of a residual value by Majestic.Portions of the Equipment Leasing’s lease amortization scheduleappear below:
Required:1. What is Majestic’s lease liability afterthe first lease payment??2. What amount would Majestic record as aright-of-use asset?3. What is the lease term in years?4. What is the effective annual interestrate? (Round your percentage answers to 1 decimalplace.)5. What is the total amount of leasepayments?6. What is the total effective interestexpense recorded over the term of the lease?
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