Hello, I really need help with these questions. I will appreciate your help!!.

A lease qualifies as a capital lease for both lessee and lessor. The lessee's interest rate is 5%, the lessor's interest rate is 6%. Both lessee and lessor are aware of the other's rate. Indicate the rate to be used to account for the lease by the lessee and lessor, respectively

Select one:

a. lessee 5%, lessor 5%

b. lessee 6%, lessor 5%

c. lessee 5%, lessor 6%

d. lessee 6%, lessor 6%

Question 2

On January 1, 2016, The Hammel Company (lessee) entered into a five-year, noncancelable lease for a machine with payments of $25,981.62 due each January 1. The first payment is due January 1, 2016. The McMillan Company (lessor) has a 10% interest rate known by Hammel.

Other data: McMillan's 2016 Interest Revenue will be:

Select one:

a. $10,000

b. $8,402

c. $7,602

d. $7,402

e. $8,602

Question text 3

Assume a $100 cash dividend is declared; 70% of the dividend is a liquidating dividend. Indicate the change in Dividends Payable and Additional Paid-in-Capital, respectively.

Select one:

a. Decrease $70, Decrease $100

b. Decrease $30, Decrease $100

c. Increase $100, Decrease $70

d. Decrease $30, Decrease $30

e. Increase $70, Decrease $70

Fair Value and Book Value of machine: $100,000 Property Taxes included in annual $25, 981.62 payments: $2,000 No renewal options. No salvage value. Straight-line depreciation used by both lessee and lessor Economic life of the asset is 5 years