1. (Calculator set on BEG). Assume you want to lease a piece of equipment to a customer over a 5-year period with quarterly lease payments made at the beginning of each quarter. The typical sales price of the equipment is $250,000. The lease includes a bargain purchase option at the end of year 5 of $10,000 that you are reasonably certain the lessee will exercise. What quarterly lease payment will you calculate if you want to earn 6% per annum over the life of this lease?

2. Bonds with Detachable Warrants.
   1. On June 30, 2016, Cano Corporation issued $8 million of 4% bonds for $8,200,000. Each $1,000 bond was issued with 15 detachable stock warrants, each of which entitled the bondholder to purchase one share of Canos no-par common stock for $45. Immediately after issuance of the bonds, the warrants were separately trading for $3 each. Prepare the journal entry to record the issuance of these bonds.

2. For 2 points extra credit, calculate the effective interest rate on the bond portion of this sale, assuming the bonds mature in 10 years. (Calculator set on END)