The accounting records of Braintree Foods, Inc., include the following items at December 31, 2020:

{Requirements}
1. Why is the interest-payable amount so much less than the amount of interest expense?
2. Assume that all of the existing liabilities are included in the information provided. Calculate the leverage ratio and debt ratio of the company. Evaluate the health of the company from a leverage point of view. What other information would be helpful in making your evaluation?
3. Independent of your answer to (2), assume that Footnote 8 of the financial statements discloses commitments for operating leases over the next 15 years in the amount of \(\$ 3,000,000\). If the company had to capitalize these leases in 2020 , how would it change the leverage ratio and the debt ratio? How would this change impact your assessment of the company's health from a leverage point of view?

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Mortgage note payable current portion....... Accumulated pension benefit obligation....... Bonds payable, long-term. Total assets $ 97,000 Accumulated depreciation $4,200,000 equipment..... 162,000 470,000 Discount on bonds payable 1,680,000 (all long-term). 22,000 Mortgage note payable Operating income.. 390,000 long-terin 314,000 Equipment 745,000 Bonds payable, current portion 420,000 Pension plan assets Interest expense..... 227,000 (market value).. 425,000 Interest payable. 74,000