Chapter 15 Homework Saved Help Save & Exit Submit Check my work 4 On January 1, 2021, National Insulation Corporation (NIC) leased equipment from United 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 NIC. Portions of the United Leasing's lease amortization schedule appear below: 3 points Payments Jan. 1 2021 2021 2022 2023 2024 2025 2026 Effective Decrease in Outstanding Interest Balance Balance 192,501 20,000 172,501 17,250 2,750 169,751 16,975 3,025 166,726 16,673 3,327 163,399 16,340 3,660 159,739 15,974 4,026 155,713 20,000 20,000 20,000 20,000 20,000 20,000 eBook Print 2038 2039 2040 2041 References 20,000 20,000 20,000 35,000 7,364 6, 101 4,711 3,182 12,636 13,899 15, 289 31,818 61,006 47,107 31,818 Required: 1. What is the lease term In years? 2. What is the asset's residual value expected at the end of the lease term? 3. What is the effective annual Interest rate? 4. What is the total amount of lease payments for United? 5. What is the total amount of lease payments for NIC? 6. What is United's net Investment at the beginning of the lease (after the first payment)? 7. What is United's total effective Interest revenue recorded over the term of the lease? 8. What amount would NIC record as a right-of-use asset at the beginning of the lease? years 1. 2. 3. % 4. Lease term Asset's residual value Effective annual interest rate Lease payments for United Lease payments for NIC Net investment Total effective interest revenue Right-of-use asset 5. 6. 7. 8