1. Consider a company that sold bonds with detachable warrants in the past. Suppose the warrants are now being exercised. Which of the following is true about the effect of the warrant exercises on the companys balance sheet?

   	1.	Total assets and total equity both increase by the same amount
   	2.	Total equity decreases
   	3.	Total assets increase by more than total equity
   	4.	Total assets and total liabilities both increase by the same amount
   	5.	Total assets increase by less than total liabilities
   	6.	Total assets, total liabilities, and total equity all remain unchanged