80) Entity P has total assets of $800,000 and total liabilities of $500,000. If Entity P borrows $150,000 on a long-term bank loan, what will its new debt/total assets ratio be? A) 71% B) 68% C) 81% D) 53% 202) Entity B purchase a two-year insurance policy on Jan 1 for $4000 and debited it to prepaid insurance. If Entity B does not make the proper adjusting entry at the end of the year. Which of the following is correct? Use the correct adjusting entry first! A) Current assets will be understated B) Net income will be understated C) Current assets will be understated D) Retained earnings will be understated