I'm needing help figuring out which interest rate to use for problem 1. I also need help with problem 2 altogether.

Homework 9 (1) Two different bond issuances are listed here with interest payments made semiannually: Bond Face Value A $100,000 B $100,000 Stated Interest Rate 6% 9% Effective Interest Rate 8% 6 Term 10yrs 10yrs a. Compute the proceeds of each bond issuance. (Remember that interest rates provided are annual rates.) b. For each bond, indicate whether the balance sheet value of the bond liability will increase, decrease, or remain the same constant over the life of the bond. c. For each bond, indicate whether the interest expense recognized each period will increase, decrease, or remain constant of the life of the bond. (2) Junk Peddler Inc., leases its carts which it uses to sell trinkets. On Jan 1, 2014, the company leased a cart and agreed to make lease payments of $20,000 each year. The lease contract has a term of five years, after which the cart can be purchased by Junk Peddler for a nominal price. Assume an effective rate of 10 percent. a. Compute the annual rental expense if the lease is treated as an operating lease b. Prepare the journal entry on Jan 1, 2014 if the lease is treated as a capital lease. c. Compute the total expense associated with the lease during the first year if the lease is treated as a capital lease. d. Which of the two methods of treatment (operating or capital) would rise to a higher net income in the first year? Which method would give rise to a lower debt/equity ratio? e. How can the leases be arranged to treat them as operating