A seven-year capital lease of an executive jet requires semiannual payments of $200,000 at the beginning of

Question:

A seven-year capital lease of an executive jet requires semiannual payments of $200,000 at the beginning of each six-month period. The company can borrow funds for 5 to 10 years at 7.4% compounded semiannually.
a. What long-term lease liability will the firm set up at the start of the term of the lease?
b. What liability will remain half way through the term of the lease?