4K input, HD output and a tired laptop - workflow questions

Hi there,

I want to get my workflow all set up and working correctly pre-editing, but am having some issues.

I have been supplied 4K footage for an HD project.

My laptop is not happy working with the 4K, and I don't need it either - I have to deliver my project in HD.

Which of these 2 options is the best approach?

1) Create proxies of the 4K footage, relink at the end of the edit and render out from the 4K masters (which is what I've started doing but am prepared to do option 2 if its better in the long run).

2) Use Media Encoder to transcode all of the 4K rushes to HD BEFORE importing anything to Premiere Pro, then create proxies from that, and use the new HD files as my masters and forget all about the 4K rushes.

     - If I do this, what output settings should I use?

My biggest concern with either of these options is:

     - If I am working with proxies of 4K files and then render out in HD will the clips be full frame or cropped?

     - If I transcode all the 4K footage to HD via media encoder will it maintain the right frame size or crop down?

Thank you.