1/ The distinction between senior and subordinated debt is associated with

general debenture bonds.

mortgage bonds.

collateral trust bonds.

commercial bonds.

2/ DRM Corporation leased a piece of machinery on January 1, 2020. At the date of signing the asset and lease obligation were recorded for $42,000. The first lease payment of $6,000 was due December 31, 2020 and the interest rate they used in their calculations was 7%. The lease term was 10 years. Which of the following best describes what would be reported on DRMs Statement of Income for the year ending December 31, 2020?

$6,000 Lease Expense

$6,000 Lease Expense, $4,200 Depreciation Expense

$2,940 Interest Expense, $1,260 Depreciation Expense

$2,940 Interest Expense, $4,200 Depreciation Expense

3/ A debt to equity ratio of 50% indicates that

half of the companys assets are financed through equity.

50% of the companys interest expense comes from long-term debt financing.

the company is close to bankruptcy.

the company spends 50% of its operating earnings on interest.