Question: I'd like to play Eagles - Hotel California, so I looked into the sheet music, but there is something I don't understand: 

[![Hotel California -- Eagles](https://i.stack.imgur.com/nF23s.png)](https://i.stack.imgur.com/nF23s.png)

It says: `guitar 1 is a 12-string acoustic played with capo behind 2nd fret`.  

I don't understand how is it possible. If you look at the chords shown, there is an E7 which has to put a finger on fret 1 in G-String. How is it possible if there is a capo on 2nd fret? 

On the other hand, if the chords are shown from 2nd fret, E7 chord is no longer an E7. It'd be a F#7, right?

Answer: 
The chords shown for guitar1 become relative to the capo. So you´d place the capo behind fret 2 and play for example the E7 as shown, first finger, first fret on the third G string, just behind the capo. So in fact your capo becomes fret 0, the start of your fret board.

By placing the capo on the second fret, the tuning of youre guitar is raised by a whole tone, which results in Am becoming a Bm, G with A in the bass becoming A with a B bass etc.
The chord shapes are shown as if the capo is at the nut of the guitar. This way, it's easier for a beginner. So, the 'E7' is what is actually played, as if the guitar starts at fret 2, but the sound will be F#7.If they called it 'F#7', the player would (over) compensate, and play it two (more) frets higher. It's done this way to get the voicing of the chords to sound as they do.